The floods in Thailand, which supplies 45 percent of the world’s hard disk drives (HDD) used in computers, could reduce global PC shipments by between 12 percent and 14 percent next year as production disruptions are forecast to last through April, Fitch Ratings’ Taipei-based technology analyst Kevin Chang (張崇人) said yesterday.
“We estimate it will take another three months for HDD manufacturers to return to full capacity after the flood waters recede, implying at least five months of restricted production through to the end of April 2012,” Chang said.
Fitch said HDD production facilities, which suffered severe flood damage, would need even more time — from six to nine months — to repair and reinstall production line equipment.
Even for facilities located in less affected areas, delays could last six months as many suppliers of key components have also been affected by the floods, the ratings agency said.
Prior to the floods, Chang forecast that global PC shipments would grow 5 percent next year on the back of pent-up demand from an extended replacement cycle, as well as the launch of ultrabooks and Windows 8.
He now expects PC shipments to retreat into negative territory next year, contracting 8 percent from this year because of insufficient hard disk drives.
The shortage would be most evident in the first quarter of next year, with the impact estimated at between 30 percent and 35 percent, driving manufacturers to increase production output in other locations, such as China and Malaysia, while a greater number of PCs could be shipped with NAND flash-based solid-state drives instead of hard disk drives, Chang said.
Prior to a full recovery of hard disk drive capacity in the fourth quarter of next year, Acer Inc (宏碁) is likely to see sales fall 9 percent next year from this year, compared with the 5 percent increase Fitch first predicted.
“The implication of the Thai floods on Acer’s credit rating is neutral because the disaster does not affect the company's ability to service its medium to long-term debt,” Chang said.
However, the poor global economy and its unfavorable impact on the business climate are more important to Acer than the Thai floods, he said.
Acer’s revenue is expected to fall 27 percent this year because of the company’s heavy exposure to developed markets, particularly Europe and the US, and its late entry into the tablet market, Chang said.
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