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Hard-Drive Shipments Picking Up Speed

El Segundo, Calif.
– Worldwide hard-drive production will return to pre-Thailand flood levels by
the third quarter of 2012, according to an IHS iSuppli report.

The report gives a
glance at the full impact the flooding had on hard-disk-drive (HDD) production
starting in Oct. 2011.

According to IHS storage
analyst Fang Zhang, year-over-year production fell 26 percent in the fourth
quarter of 2011. This situation is slowly starting to reverse itself as HDD
makers Western Digital and Seagate began placing their manufacturing facilities
back online in the last month.

First-quarter 2012
production will be down 13 percent year over year and down 5 percent in the
second quarter. Only in the third quarter will shipments increase slightly: 2

By the fourth
quarter, production will be fully up to speed, with shipments almost 50 percent
higher than what took place during the height of the flooding in 2011.

On a sequential
basis, Zhang said, the recovery can be seen as quite rapid. First-quarter
shipments are 13 percent higher than in the fourth quarter, and these will grow
14 percent in the second quarter and 13 percent more in the third.

The dearth of
supply pushed HDD pricing up 28 percent in the fourth quarter of 2011. Pricing
will decline as supply builds, but Zhang is only predicting a 3 percent drop
during this quarter and an additional 9 percent during the second quarter.

Another factor
keeping prices high is the new position Seagate and Western Digital hold. Each has
absorbed a major competitor in the last year, with Seagate buying Samsung’s
storage business and Western Digital burying Hitachi GST. This will enable
higher prices due to lack of competition.