The massive flooding in Thailand is disrupting supplies of hard disk drives (HDDs) for the world’s personal computer makers, according to companies and market intelligence firms.
About 40 percent of all HDDs worldwide are produced in Thailand, making it the second-largest exporter of the parts after China.
John Rydning, research vice president for the drives at technology consultant IDC, estimated that factories in Thailand currently affected by flooding account for about 25 percent of worldwide HDD production.
“There’s definitely going to be an impact on HDD customers this quarter and next quarter,” Rydning said on Friday. “It’s going to take several months for the HDD industry to recover.”
Apple Inc chief executive Tim Cook told financial analysts this week he was “virtually certain” that the flooding in Thailand would lead to an overall industry shortage of HDDs.
“Like many others, we source many components from Thailand,” Cook said during the quarterly earnings call for the manufacturer of the Macintosh computer line.
“There are several factories that are currently not operable and the recovery timeline for these factories is not known at this point,” he said.
“It is something that I’m concerned about,” Cook said. “How it affects Apple, I’m not sure.”
Fang Zhang, an analyst for storage systems at market intelligence and technology consultant IHS iSuppli Corp, said the flooding could cause a 30 percent drop in HDD production in the fourth quarter of this year.
Fang said in a statement that the floods could potentially lead to an HDD supply shortage this quarter that may last into the first quarter of next year.
Before the disaster, IHS iSuppli had forecast production of 176.2 million hard drives during the fourth quarter.
Rydning said the impact “is mitigated somewhat by HDD inventory that existed entering the flood period.”
“Those inventories will help to satisfy some of the HDD requirements of major customers,” he said. “But we expect that any inventory available will be depleted, probably in the month of November.”
Rydning said the flooding in Thailand was the second major natural disaster to hit the HDD industry this year, coming on the heels of the earthquake and tsunami in Japan in March.
Apple is just one of the world’s computer manufacturers expected to be affected by the tightening of supply of hard drives.
“Amongst all of the PC vendors the pain is going to be felt by everyone — more so by some of the smaller PC vendors than the bigger ones,” Rydning said.
Major PC manufacturers will be better able to weather the crisis because of their access to inventory and their ability to negotiate more strategic supply agreements, he said.
Rydning said the two HDD assembly companies the most heavily impacted by the flooding are Western Digital and Toshiba.
More than a dozen HDD component suppliers were also affected because “they’re congregated and clustered in that same region,” he said.
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