The hard disk drive (HDD) market is on course to suffer its worst downturn since the financial crisis of 2008, with fourth quarter shipments set to drop nearly 28% on a quarterly basis, according to analyst house IHS iSuppli, which last night issued an updated assessment of the impact of the disastrous floods still affecting Thailand.
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By IHS estimates, 30% of HDD production in the last three months of the year will be lost, resulting in a significant components shortage and impacting production of other devices and systems.
Analysts said that both Western Digital and Toshiba were likely to be the big losers from the disaster, with Western Digital looking set to lose its status as the world's largest shipper.
In the PC market, the shortages are unlikely to hit immediately, as most vendors have sufficient stockpiles to last through the Christmas quarter, but IHS said the impact of the disaster would begin to impact notebook PC production early in 2012.
In its Q1 results out last week, Seagate said that while its own facilities in the region had been spared, it was working with external suppliers and "supporting their efforts to rebuild the supply chain as quickly as possible" and conceded it would experience significant disruption to is production levels.
"Given the severity of the situation ... the effects on our industry are likely to be substantial and will extend over multiple quarters," said Seagate. "As we strengthen our supply chain and optimise our output we are engaged with customers to realign build schedules, product mix and reset delivery expectations."
John Coyne, Western Digital CEO, said the firm was "working with suppliers to assess the extent of their impact and help devise short- and long-term solutions."
"This is a complex and dynamic challenge that will require extensive rebuilding for the Thai people and government, and present unprecedented obstacles to the hard drive industry for multiple quarters," he said.
"We [are] doing everything we can to minimize any disruptions in our service or delivery of our products," said Coyne, asking that Western Digital customers remain patient for "a few quarters".
Andy Cordial, managing director of Origin Storage, warned of "significant price increases" in the storage market for some months to come, adding: "Origin will do everything possible to continue supply of our solutions at a fair market price."