The Newegg price charts on Camelegg sum this up illustratively:
Thailand manufactures 25% of the world's hard drives, and
the severe
2011 monsoon season floods affected some of its largest industrial
parks, where many hard drive manufacturers and component suppliers
are located, causing worldwide shortages and price increases.
Between October 15th and 21st, water penetrated
the Bang Pa-in Industrial Park,
the Navanakorn Industrial Park (the largest of its kind in Thailand),
and the Bangkadi Industrial Park.
Seagate is relatively lucky as it is merely affected by the components shortages
while none of its factories in Thailand have been inundated according to a November 3rd
SEC
filing. As a result, Seagate's stock is up +81% between October 6th's low
of $10.1 and November 5th's high of $18.3 (disclosure: as a value investor,
I hold STX —it was
undervalued, and still is.)
Meanwhile, shortages have caused phenomenal hard drive price increases. Over the past
month, I observed on Newegg:
1TB SATA hard drives went from $50/TB to $140/TB, +180%, almost triple the price
1.5TB from $47/TB to $93/TB, +100%
2TB from $40/TB to $72/TB, +80%
3TB from $67/TB to $87/TB, +30%
Large-scale data center operators who are currently growing very rapidly with a focus
on storage must be financially impacted by the situation. I thought of
Amazon Web Services and, sure enough, one of my favorite tech bloggers
James Hamilton (vice president on the AWS
team) wrote an insightful post entitled
Serious Hard Drive Shortage Expected for at Least 2 Quarters."Higher drive and component prices will persist into the summer months of 2012"
Yikes!
