Hard Drive Shortages Due To Thailand Floods Expected To Take Toll On PC Makers

continues to wreak havoc on the hard drive industry IHS iSuppli predicts

According to the firm, the hard drive industry in the fourth quarter will see its worst downturn in three years. With Q4 hard drive shipments expected to decline to 125 million units – down 27.7 percent from 173 million in the third quarter – the industry will see the largest sequential decrease on a percentage basis since the fourth quarter of 2008.

This shortage is predicted to boost average hard drive disk pricing by 10 percent in the fourth quarter.

Thailand-based hard drive manufacturers such as Western Digital and Toshiba have already been forced to halt production. In light of the stoppage, Western Digital may lose its number-one spot for most world-wide hard drive shipments in Q4, falling to third.

As hard drive shipments continue to decline, effects on PC production seem almost inevitable, IHS iSuppli reports. Specifically, hard drive shortages are thought to have the greatest impact on notebook PCs, as many of the plants ravaged by the flooding produce components for mobile computing.

Although IHS analysts reported that healthy PC inventory levels may be able to sustain the market for at least the remainder of the year, several PC manufacturers, including Acer and Asustek, have already reported disruptions.

"The whole PC production chain is stuck at a bottleneck," Acer CEO JT Wang told the Financial Times. "This is not a problem that we can solve by ourselves and so we have started raising prices."

The firm also reported that fourth-quarter sales may see a five to 10 percent decrease, compared to third quarter.

Asustek also anticipates lower-than-hoped for fourth-quarter shipments because of hard drive shortages. "Substitutes for HDD are very few, so if the situation persists, not only notebook production will be affected but also desktops, and other component shipments will also drop," Asustek CFO David Chang told Reuters.

Lenovo, the second biggest PC manufacturer in the world, is also bracing itself for a potential hit.

The company is "still assessing the full impact, but does anticipate some constraints on availability of hard disk drives (HDDs) as a result of the flooding in Thailand," a Lenovo spokesperson told CRN. "Currently, we have supplies adequate to meet expected demand for all products. In the near future, we expect to begin seeing supply constraints as a result of this industry-wide problem, a situation that likely will last at least through end of the year and into the first quarter of 2012, as HDD manufacturers and their suppliers work to recover production capacity."