Thai floods expected to hit PC shipments into 2012

Nov 10, 2011 by Paul Handley

Thai flooding will significantly slow the global production of personal computers well into 2012, analysts said Thursday, as the country's huge hard disk drive industry struggles to its feet.

Supplies of hard disk drives (HDDs), the most critical component in personal computers, could tighten by 30 percent in the fourth quarter, forcing PC makers to tail back production, experts said.

According to industry specialist International Data Corporation (IDC), that could bring about, in the worst case scenario, a 20 percent cut in PC shipments in the first quarter next year.

Thailand's huge HDD industry, mostly located in industrial estates in the central plains, supplies about 40 percent of world market for the crucial memory components.

"The HDD shortage will affect smaller PC vendors and lower priced products most," like netbooks and the cheapest computers, said Loren Loverde of IDC.

"However, even the largest vendors are expected to face HDD shortages, particularly for portable PCs where the market is more consolidated," Loverde said.

Consultancy IHS iSuppli said the floods, which since July have inundated much of low-lying central Thailand, including the capital Bangkok, would cut global HDD shipments by some 51 million units in the current quarter, to 125 million units.

"Prices for HDDs have already begun to move higher on the anticipation of shortages, and it is likely that prices will remain elevated, possibly by more than 10 percent, for several quarters to come," IHS said.

Key producers like Toshiba and Western Digital have shut down large parts of their Thai production capacity due to the floods, which have also forced Thai-based producers of HDD components to halt production as well.

Jefferies & Co analyst Peter Misek said in a new research note that major PC makers like Dell and Hewlett-Packard have the disk drive stocks on hand to handle any shortages for the rest of this year.

The shortage "could counterintuitively help Dell's and HP's January quarter PC business as retailers and distributors clamor for as much supply as possible," Misek said.

"However, we believe a significant shortfall could occur in the April quarter once PC and HDD inventories are depleted and HDD production is still undersupplied."

As Thailand moves into the dry season and the floods recede, HDD producers should be able to get back to work by the end of the year, and IDC forecasts that the market will be back to normal with stable prices by June.

But the HDD shortage could also hit another part of the industry -- already-oversupplied dynamic random-access memory (DRAM) components.

"A fall in PC sales in the first half of 2012 will further depress the DRAM market. Manufacturers will continue to idle capacity while suffering weak pricing," said IHS iSuppli analysts.

IHS iSuppli said earlier that the floods had shut down assembly and test operations that many semiconductor makers run in Thailand as well, causing problems in that sector.

Explore further: China's Xiaomi raises more than $1 bn in funding

add to favorites email to friend print save as pdf

Related Stories

Thai flooding disrupting hard drive supplies

Oct 29, 2011

The massive flooding in Thailand is disrupting supplies of hard disk drives (HDDs) for the world's personal computer makers, according to companies and market intelligence firms.

Thailand flooding could affect PC supplies, prices

Oct 19, 2011

(AP) -- The personal computer industry, already reeling from depressed demand, has been dealt another setback: Massive flooding in Thailand has curtailed production of a critical component - computer storage ...

Global PC shipments up 22 pct as businesses spend

Jul 14, 2010

(AP) -- Market research group IDC said Wednesday that worldwide shipments of personal computers climbed 22.4 percent in the second quarter as businesses replaced aging computers and consumers continued to show interest in ...

Global 4Q PC shipments jumped on price cuts

Jan 13, 2010

(AP) -- Worldwide shipments of personal computers came back strongly in the fourth quarter of 2009, researchers said Wednesday, led by U.S. consumers lured by low prices during the holiday shopping season.

PC shipments slide in 1Q, HP tops Dell in US (Update)

Apr 15, 2009

(AP) -- Global shipments of personal computers fell 7.1 percent in the first three months of the year, but the decline was smaller than expected and research group IDC on Wednesday said the industry could turn around by ...

Recommended for you

As dust clears, what's next for Sony?

5 hours ago

The Sony hacking attack continues to deliver more dramatic plotlines than any fictional movie, but meanwhile the movie studio must move forward and tackle the next steps in minimizing the mess. Will Sony ...

It's down to the wire for online shopping

9 hours ago

As the holiday shopping season winds down, FedEx, UPS and online retailers are using the last few days to try to avoid the problems that occurred last year when severe winter weather and a surge in late orders ...

China's Xiaomi raises more than $1 bn in funding

Dec 21, 2014

China's top smartphone seller Xiaomi Corp. is raising more than $1 billion in a fresh round of funding, a move which would raise its valuation above $45 billion, a report said Sunday.

Why the Sony hack isn't big news in Japan

Dec 20, 2014

Japan's biggest newspaper, Yomiuri Shimbun, featured a story about Sony Corp. on its website Friday. It wasn't about hacking. It was about the company's struggling tablet business.

Sony faces 4th ex-employee lawsuit over hack

Dec 20, 2014

A former director of technology for Sony Pictures Entertainment has sued the company over the data breach that resulted in the online posting of his private financial and personal information.

Sony tells AFP it still plans movie release

Dec 20, 2014

Sony Pictures boss Michael Lynton denied Friday the Hollywood studio has "caved" by canceling the release of "The Interview," and said it still hoped to release the controversial film.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.