The recent floods in Thailand may effect your hardware market harder than you'd expect. Thailand, the second largest maker of Hard Disk Drives, only after China has almost half of the global output manufacturing there. The damage caused by the floods is expected to keep the companies closed for a decent amount of time.
The floods have already put a halt on almost 30 percent of the hard disk production. This would translate to slow sales in the early quarter of 2012, hurting the hardware industry which is already suffering a dip due to slowing corporate spending on technology hardware.
According to sources, the floods will have a direct influence on the market of Taiwan PC manufacturers, as well as Asustek and Acer. Lenovo, Western Digital, Seagate will all see a hard disk constraint as Thailand shuts down. Even with each organization having its own inventory, considering the festive season of November and December, it is not supposed to last enough to not affect the sales. Pegatron Corp, the main contract manufacturer for Asustek Computer Inc, says that they'd do fine for six to eight weeks though after that it would depend on how fast things return to normal in Thailand.
A way out could be that the other Hard Disk Manufacturing plants in other countries double their output to compensate for Thailand's deficiency. But not all hard drive fabs are made the same, and it’s not viable to shift all production to various facilities. If a solution is not found soon, a 10-20% hike in Hard Disk prices is expected in the coming months.
Image Source: XBIT Labs | Via: DigitalTrends