Due to flooding in Thailand, predicts IDC
Widespread flooding is bringing unprecedented devastation to the people and economy of Thailand. With operations disrupted at more than a dozen HDD factories, damage to the HDD industry is significant.
And this will have a direct impact on worldwide PC shipments through the first half of 2012, according to a new International Data Corporation report.
In the first half of 2011, Thailand accounted for 40-45% of worldwide HDD production. As of early November, nearly half of this capacity was directly impacted by the flooding. In addition to assembly and component facilities being inundated with water, the industry faces work stoppages due to poor access and power outages. The full extent of the damage to HDD industry factories will not be known until the floodwaters recede, although it's already clear that there will be HDD supply shortages into the first quarter of 2012.
The severity of HDD shortages in the coming months largely depends on the industry's ability to recover lost production capacity in Thailand. While IDC believes HDD industry participants will recover and restore HDD production capacity relatively quickly, HDD supply will remain constrained for an extended period of time.
As a result, PC vendors should plan
for and expect the following:
And this will have a direct impact on worldwide PC shipments through the first half of 2012, according to a new International Data Corporation report.
In the first half of 2011, Thailand accounted for 40-45% of worldwide HDD production. As of early November, nearly half of this capacity was directly impacted by the flooding. In addition to assembly and component facilities being inundated with water, the industry faces work stoppages due to poor access and power outages. The full extent of the damage to HDD industry factories will not be known until the floodwaters recede, although it's already clear that there will be HDD supply shortages into the first quarter of 2012.
The severity of HDD shortages in the coming months largely depends on the industry's ability to recover lost production capacity in Thailand. While IDC believes HDD industry participants will recover and restore HDD production capacity relatively quickly, HDD supply will remain constrained for an extended period of time.
As a result, PC vendors should plan
for and expect the following:
- Significant HDD shortages by mid-November 2011 that will continue into 1Q 2012.
- A large part of PC production for Q4 2011 shipment has already taken place or can be completed with existing HDD inventories, limiting the impact on Q4 PC shipments to less than 10%. But in a worst-case scenario, total PC shipments could be depressed by more than 20% in Q1 2012 vs. previous forecasts as a result of the HDD shortage.
- Higher HDD prices as demand exceeds supply and manufacturers face increased costs for components, expedited shipments, and shifting of production to new locations.
- The HDD industry begins to recover in 1Q 2012, and HDD pricing stabilizes by June, with the industry running close to normal in the second half of 2012.
- Opportunities for larger PC vendors to capture enterprise accounts from smaller competitors and accelerate industry consolidation, particularly in faster growth markets.
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