Recent flooding in Thailand has resulted in significantly higher prices for hard drives. How much higher? Just a few weeks ago I purchased a 500GB Western Digital SATA hard drive (WD5000AAKX) for $42.98. That same drive now retails for $99.00. A 2GB Samsung SpinPoint which was $79.99 is now $148.99. What exactly happened to cause such a precipitous increase?
In turns out that around 30% of the world's hard drive manufacturing capability resides in Central Thailand, in the Bang Pa-In industrial estate. This estate is essentially a gigantic floodplain, and after nearly two months of relentless rain, the series of dikes surrounding the estate failed. By October 15th, Western Digital's production facilities were under 4 feet of dirty water. Toshiba, which makes more than 10% of the world's hard drives, suffered a similar fate. What about Seagate? Well, even though Seagate was not directly impacted by the flooding their drives relied on numerous components produced by companies in the Bang Pa-In estate.
This supply disruption will have a profound effect on consumers for quite a while. Seagate's CEO sees significantly higher drive prices through 2012, and, perhaps even more ominously, Western Digital has not made an official announcement since October 19th. The largest consumers of hard drives (i.e. computer manufacturers) will weather this storm by locking in supply, which leaves retail consumers out-of-luck.
If you can delay purchasing a hard drive you will certainly benefit from a stabilizing market, but if you need a drive now (i.e. drive crash) be prepared to pay at least double what you would have a few months ago. Maybe this will speed the transition to solid-state drives (SSD) and cloud computing.