Hard Disk Drive Prices Not Expected to Return to Pre-Flood Levels Until 2014
Market researchers at IHS iSuppli have predicted that the Hard Disk Drive prices will not return from the pre-flood levels until 2014 .
The average selling prices ( ASP ) of the HDD market was $51 in the third quarter 2011 , which soared to $66 in the fourth quarter after the Thailand floods that occurred in October . The ASP is still held steady at $66 in Q1 2012 and is expected to decline $65 in the second quarter .
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Floods caused a 29% decline in the shipments in fourth quarter 2011 , but the production is rising now and will recover completely by Q3 2012 . Shipments rose by 18 percent to 145 million in the first quarter and by 10 percent to 159 million in the second quarter.
In the third quarter, shipments are expected to rise by another 10 percent to 176 million. This will mark the first time in 2012 that shipments will exceed their 2011 quarterly levels, up from 173 million in the third quarter of 2011.
Despite exceeding pre-flood shipment levels in the third quarter, pricing is expected to remain inflated.
“HDD manufacturers now have greater pricing power than they did in 2011, allowing them to keep ASPs steady,†said Fang Zhang, analyst for storage systems at IHS. “With the two mega-mergers between Seagate/Samsung and Western Digital/Hitachi GST, the two top suppliers held 85 percent of HDD market share in the first quarter 2012. This was up from 62 percent in the third quarter of 2011, before the mergers. The concentration of market share has resulted in an oligarchy where the top players can control pricing and are able to keep ASPs at a relatively high level.â€
Beyond the supply-side factors, demand-related issues also will contribute to inflated HDD pricing throughout 2012 and 2013.
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