Hard Drive Shortage Relief Coming In Q1 2012 205
MojoKid writes "According to new reports [note: source article at DigiTimes], global HDD production capacity is getting ready to increase to 140-145 million units in the first quarter of 2012, or about 80 percent of where it was prior to when the floods hit Thailand manufacturing plants. HDD production was sitting around 175 million units in the third quarter of 2011 before the floods, after which time it quickly dropped to 120-125 million units. Since then, there's been a concerted effort to restore operations to pre-flood levels."
Re:Market pressures. (Score:5, Insightful)
Most end users never noticed. People that needed the storage paid the higher price. People that didn't actually need it just held off until prices went down.
Re:Market pressures. (Score:5, Insightful)
Well, according to the article, "Due to increased costs of components and materials, HDD prices are likely to rise 30-40% from the level before the floods by the end of 2012, the sources indicated."
A 30-40% increase is A LOT, esp. given the present and foreseeable economic conditions.
Anyway, how is one supposed to be "efficient" with regards to JPG, MP3, and other highly-compressed file formats?
Price relief to come some time later. (Score:4, Insightful)
Granted, the drop in supply was more abrupt than the restoration of supply, so one would expect prices to follow the same curve.
It may be too much to hope that this leads to more geographic diversity in manufacturing, but I hope it's at least produced some lasting acceleration toward solid-state storage.
First quarter of 2012? (Score:5, Insightful)
Uhhh... unless they're using some new calendar I'm unfamiliar with, the first quarter is about two-thirds over. The fact that they're using the future tense for something which is already mostly gone makes me wonder just how well informed this article is.
That's all great, but.... (Score:3, Insightful)
The floods caused, what, hundreds of millions of dollars worth of infrastructure damage? Who's ultimately going to write the final checks that pay for all the repairs (and likely upgrades)? Don't we know who? It will be every person and company that buys those products and the population of Thailand. Ultimately the entire global economy pays the bulk of the cost. The One Percenters who control those factories damned sure aren't gonna foot much of the bill. So... don't be a fool and expect prices to return to where they would have been otherwise. That will take a decade.
(It's exactly how recessions work: One Percenters feel a pinch in their ability to concentrate wealth, and in a perverse reversal of the Trickle Down theory they make all those they employ suffer instead so that they regain the full extent of that ability. The only difference in this case is that the proximal cause is an obvious natural disaster. Economists have been feeding us lies about such things for decades.)
Re:That's all great, but.... (Score:5, Insightful)
I'm sorry, what exactly are you raging about? Just about every pricing theory from monopoly pricing to perfect competition require that costs be passed to you. If raw material costs go up, the costs are passed to you. If labor costs go up, the costs are passed to you. If people shoplift, the costs are passed to you. If the government adds a new tax, the costs are passed to you. If natural disasters cause damage, the cost is passed to you. Every business operates on margins, that more money comes in through revenue than what leaves through cost. That goes for everyone from the 1%ers to the corner shop.
Do you expect it to be like in good years they'll take a profit, and in bad years they'll put the money back? Seriously? I wonder how you'd like it if your salary or your bank account worked like that. No, if I owned Newegg I'd expect it to turn a profit whether disks costs $50 or $300, my job is to beat all the other stores trying to make a business, not fight the market forces. In the long run I expect it to be the same for factories, if risk of flooding is a cost of doing business we must account for that and make sure our prices reflect all the costs, it's the ones that don't that are foolish. In short, I find your idea that 1%ers should "foot the bill" rather absurd.
But this will be like gas prices right? (Score:4, Insightful)
Skyrocket the moment they think supply is threatened and then fall back down glacially while waiting for the next disaster or crises. Supply may increase as production ramps up but I'm betting that the middle men and manufacturers will keep prices high for as long as they can. Some manufacturers apparently didn't suffer the same losses but jacked prices up too so this should be no surprise at all...
Re:Something wrong here... (Score:3, Insightful)
Not at all. There's nothing inevitable or deterministic in your suggestion. The secondary market isn't relevant to all the participants of the primary round-robin system. Most participants will use the hard drive they got for their own projects (that's why they joined the round-robin queue in the first place). A small fraction only will decide to defer their projects, and sell their drive on a secondary market.
The secondary market is more expensive, but clearly it's a fallacy to postulate that the secondary market somehow overrides or replaces the primary round-robin allocations.
Heh. Let me decode what you seem to be saying. The state ensures that all the population is able to obtain access to goods, and that is exactly as fair and legitimate as letting people die in the streets? Moreover, your argument seems to confuse the meanings of price and cost. In a free market, the price is determined by supply and demand, so actual cost is irrelevant. Why should the actual cost be suddenly such a big deal in a rationing system? You can't have it both ways. If you criticize rationing on the grounds that prices don't reflect actual costs, then you *must* criticize free markets on the same terms, namely that the prices determined by supply and demand don't reflect actual costs either. Finally, if *survival* is at issue, I'd say that rationing is a lot more rational than a free market alternative, irrespective of fairness, welfare or legitimacy.
Re:Something wrong here... (Score:5, Insightful)
You're thinking too short-term. Say the government forced manufacturers to keep HDDs at their original price and sell them via lottery. The 50 HDDs would sell out. The manufacturers would look at the how much money they're making per HDD, and conclude they don't provide enough profit for them to repair their factories. Consequently, next month when the next batch arrives, there are 50 HDDs again, and 150 people (the 50 who didn't get one last time + 100 new people) wanting to buy them.
Your attempt at fair HDD distribution means there's a constant shortage. Then one day, some of the poorer people who got a HDD suddenly realizes that he can resell it for a lot more than they paid for it. A black market appears. Lots of other people who don't need HDDs realize the price differential between your fixed price and the true market price provides an arbitrage opportunity, and they enter the lottery for HDDs. Now you have 50 HDDs being produced per month, and 5000 people wanting to buy them. So of the 50 HDDs you're selling via lottery, only about 5 end up in the hands of people who actually need a HDD, the other 45 go to resellers flipping them on the black market for a profit. So most of the people who need HDDs are actually paying the higher price despite your price fixing, and the extra money is going to flippers instead of the manufacturers so there's no incentive for them to fix your real problem - a shortage of HDDs.
OTOH, if you allow the market price to increase, it provides the manufacturers the resources and the incentive to repair their factories and increase supply. Other companies who used to make HDDs but scaled it back look at the higher price, and say hey, there's a lot of money to be made, we should start making HDDs again. Next month they make 60 HDDs, and the price creeps down. Next month they make 85 HDDs and the price drops some more. And the next back they make 110 HDDs. The 10 extra means people who didn't get a HDD in previous months gradually get theirs. Eventually everyone who previously wanted a HDD gets one. Next month there are 100 new people who want HDDs.
Now the reverse of the previous situation happens. There are only 100 people who want HDDs, but the manufacturers are still making 110. There's an oversupply. The manufacturers cut their prices below the 100-drive level to try to sell out their drives before their competitors can. The market price now settles at the lowest price the 100th seller is willing to sell for. The extra 10 HDDs carry over to the next month and now there's a 20 drive oversupply, driving the price even lower. Eventually some of the manufacturers see their dropping profit, cry uncle, and scale back production. The manufacture of HDDs stabilizes again at 100 per month, exactly matching demand.
This isn't a system which favors sellers over buyers. It treats both the same. Sellers are at an advantage when there's a shortage. Buyers are at an advantage when there's oversupply (which is the state the HDD industry has been in most of the time - why IBM sold off its storage division to Hitachi, who is now trying to sell it to Western Digital). The price fluctuations are the feedback mechanism which cause manufacturers to produce more or fewer drives in response to demand. Eliminate it and you break the economy.
Re:Something wrong here... (Score:2, Insightful)
The fairness of this then is inversely proportionate to the gap between the rich and the poor. In absence of any regulation or mitigation this results in effect that the rich people are more important than the poor people.
In democracies if this is too blatant it can be dangerous for the rich, since the poor people out-vote the rich people. But in many places the poorer people are ignorant and badly educated, and they and their children would likely be stuck in their "caste".
Extrapolation from this: there is a limit to the amount of resources the Earth has. So who decides how the wealth and resources should be distributed and what is fair?