Earthquake In Japan Sends Mobile Market Into Shortage
Previous quarters have been a buyers market with manufacturers allowing customers
to dictate pricing. Sitting on excess stock, manufacturers were heavily
selling into the market; creating an unstable pricing structure. With
manufacturers having balanced inventory levels in anticipation of the busy fall
build schedule, we are beginning to see prices hold steady. However, in some
instances desktop and notebook drives have increased in price.
At this time, Western Digital and Seagate are supporting a healthy hard drive
market after their recent strong projections.
IDE (PSG)
Expect to see 3.5” IDE product tighten in the upcoming months with factories
fully committing to their manufacturing capacity. We anticipate that demand
will exceed supply in late August early September, which in turn will drive
prices upward five to seven percent.
Rumors of Seagate ending production of PATA drives at the end of 2007 will
transform the market as most major manufacturers have transitioned capacity
to SATA technology. Expect to see the smaller white box and external manufacturers,
who have been surviving off of the discounted cost of PATA drives, affected
the most. Open market repair demand for PATA products will become very active
as existing PATA product in the field will no longer be in warranty and the
factories will not be supporting PATA technology in the near future.
Mobile
The unanticipated double digit growth for notebooks in the developing markets
has put a squeeze on notebook drive capacity. Today, prices for 100GB PATA and
SATA are selling for the same price, but prices are expected to increase five
percent with the supply mix leaning towards SATA. However, the recent earthquake
in Japan is going to exasperate supply. Rumor has it that one of Fujitsu’s
production lines has been incapacitated and it is expected that they will be
unable to deliver up to six hundred thousand drives, resulting in Western Digital
and Seagate putting their mobile lines on allocation. The anticipated five percent
increase does not factor the impact of the earthquake. With the earthquake,
expect to see prices escalate quickly anywhere from ten to twenty percent or
even more.
Today we are seeing a strong demand for 40GB capacities. This is likely driven
by the demand of the developing market, driving the prices into the high thirties.
1.8”
The 1.8” market has been very slow with little indication that market
conditions will turn around in the near future. Supply is readily available
directly with manufacturers. The talked about 100GB micro drive has yet to make
an impact either way on the supply demand equation.
Enterprise
The SCSI market continues to be negatively impacted by excess inventory.
In order to meet quarter numbers manufacturers have been aggressively selling
excess stocks into the market, further pushing pricing downwards. The only potential
relief is when Seagate plans on exiting the market at the end of the year.
