Hard Drive Prices Up 150% In Less Than Two Months 304
zyzko writes "The Register reports that hard drive prices (lowest average unit prices) have rocketed 151% from October 1 to November 14th. The worst days have seen over 5% daily price increases. This is commonly attributed to the floods in Thailand, but there are concerns of artificial price fixing and suspicion that retailers or members of the supply channel are taking advantage of the situation."
The number varies when you break it down to individual drives, but it seems to be in the right ballpark. Anecdotally, the drive I picked up on Oct. 14th would cost me 135% more today. The flood waters in Thailand have partially receded, but aren't expected to be completely gone until early December. The damage to the country's economy and property is measured in the tens of billions.
Re:SSD's will be more attractive now (Score:5, Insightful)
Re:What a crock. (Score:5, Insightful)
I'm too lazy to look it up but the figure I remember seeing is that 25% of the world's hard drive manufacturing capacity has been impacted by the floods so the markup shouldn't be anything like 150%.
Why not? If demand is sufficiently inelastic, prices could go up 1000% if even 5% of the production capacity disappears.
What is this "average" you speak of? (Score:4, Insightful)
hard drive prices (lowest average unit prices) have rocketed 151% from October 1 to November 14th... The number varies when you break it down to individual drives, but it seems to be in the right ballpark.
(emphasis mine)
Yes, I'm glad we have rediscovered what it means to find an "average". [facepalm]
Would not be surprised (Score:4, Insightful)
Price fixing is nothing new in the manufacturing world. I would not be surprised one bit. In my case, I've made a very simple and rash decision: I'm not buying any hard drives until prices come back down to normal. A SAS expander I built two months ago for $15k would now cost $30k. My clients aren't going for that, so I'm waiting it out.
The manufacturers knew what they were getting into, when they built their factories on flood plains. The burden for that mistake should not be born by the customer.
Re:What a crock. (Score:3, Insightful)
That would require some sort of cartel-like behaviour, wouldn't it? And maybe there might be some of that, implicitly, without the major players explicitly forming an illegal cartel...
Anyway, this reminds me of how the petrol stations around here say they have to sell of their buffer first, when they don't lower prices if the price of oil goes down, but when the price of oil goes up they don't seem to have any buffers.
Re:Would not be surprised (Score:1, Insightful)
The manufacturers knew what they were getting into, when they built their factories on flood plains. The burden for that mistake should not be born by the customer.
There aren't enough hard drives.
You basically have two choices:
1. Keep prices the same, so when you have an urgent need for a drive to keep your company's servers operating there won't be any available to buy because they were all sold to people who want to download more movie torrents.
2. Increase prices so people who don't really need a drive right now don't buy it and you'll be able to buy your urgently-needed drive for twice the price it would have been a few months ago.
Lefties prefer option 1, where they keep prices artificially low and then complain when there's nothing available to buy. Sane people prefer option 2.
Re:What a crock. (Score:5, Insightful)
Not going to happen.
Last I checked, there isn't much overlap for HD / SSD manufacturers. If HD prices remain high, SSD manufacturers will have the advantage.
Which means the HD manufacturers may go the way of the dinosaur in a few years.
Re:Obvious (Score:4, Insightful)
There's no reason to rebuild. The HD market is under assault from the SSD market; hence, investing in HD manufacturing is seen as a losing proposition.
The current HD manufacturers can milk the shortage for all its worth, then their companies will die and be forgotten.
Re:Would not be surprised (Score:4, Insightful)
Finally someone who isn't an economic ignoramus in 0123456.
As for billcopc's comment that those who built their factories on flood plains should bear the cost, it is incredible to me that he thinks they aren't bearing a cost for the destruction of their factories and property. Also, they obviously built their factories there for a reason, undoubtedly having to do with costs; consumers have been reaping the benefits of that in lower prices.
Re:Would not be surprised (Score:4, Insightful)
Lefties prefer option 1, where they keep prices artificially low and then complain when there's nothing available to buy. Sane people prefer option 2.
I was with you up until that gem. Your economic statement is sound, but your generalization falls somewhere short of enlightened thought.
I don't hate gay people and think abstinence-only education is a terrible idea. That typically makes me one of the "lefties." Believe it or not, I still own and operate a successful small business and am supportive of the free market in most contexts.
Welcome to capitalism... (Score:5, Insightful)
Is any of this surprising??? A caribou in Alaska passes gas and ALL gas prices jump forty cents in the US (of course there's no price fixing or collusion going on.) In 2000 Enron screwed with the supply of electricity to the western US, precipitating the Dot Com crash (the tech bubble sustained the collapse, but it was the rolling black outs that started massive business failures.) Enron's affiliates were able to bump prices to mind numbing levels, then got caught with internal memos laughing about how they reamed California for billions. An article comes out that oat bran reduces cholesterol and suddenly a bag of granola needs to be stored in a bank deposit box.
We are haunted daily by "Whatever the market will bear..." [rhdefense.com], which is just code for "The piggies are at the trough and if I don't gouge out a piece for myself I'll miss out on the feeding frenzy." Sadly it has become the norm. Our society has put profit ahead of everything, ahead of dignity, compassion, even sanity. We've been caught in a terrible race to the bottom. This is why we debate about the sane limits to gutting economies and ecosystems. Because somebody, somewhere isn't yet done raping what remains of some vital resource.
Perhaps its time we acknowledged the darker aspects of primate behavior and started designing our society to limit the damage they can do. Checks and balances were expressly designed into our government to limit the dangers of concentrated power. Sadly we've allowed power to concentrate elsewhere and the wisdom of our founding fathers now ring louder than ever before. Corporation is the failure and its time to put things right. The price of drives is just a blip on a landscape of unbridled greed and avarice destroying the very things that make life worth living.
Re:Would not be surprised (Score:2, Insightful)
It is interesting that you contrast "lefties" with "sane people" when the option you associate with said sane people is planned economy.
Re:Don't Forget Contractually Obligated Allocation (Score:5, Insightful)
Although I don't have the specific knowledge of WDC and Seagate contracts you profess, many/most contracts have "outs" for act-of-god situations, which would apply here.
Yes, but to invoke "force majeure" - as I know it best - you must be truly unable to supply. You can't just bail on your OEM contracts because it'd be more profitable to sell them on the open market, so the open market has to absorb the whole shortage first and only then, if you're still unable to supply the OEM market can you invoke it. The OEMs would probably also have rights to a delayed fulfillment so any backlog must be cleared first before they can supply the rest of the market. So while what you say is true, it doesn't really change anything the GP said. It really only shields the HDD manufacturers from liability due to breach of contract.