Video recorder prices to spike

Flooding in Thailand slams hard drive production


In case you weren’t aware, the majority if not all hard disk drives are made in Thailand and with recent flooding ravaging the country, all signs point to higher prices and even looming shortages.

Thailand, which has experienced significant flooding since October, accounts for roughly 25 percent of all global hard drive facilities, according to industry tracker iSuppli. Western Digital, the world’s leading manufacturer of hard disk drives, said global supply may be constrained for several quarters because of the flooding in Thailand. The company has closed all of its facilities in Thailand, after monsoon rains inundated industrial parks near the capital of Bangkok.

In a release issued by SoleraTec, a provider of video lifecycle management and storage software solutions utilizing hard drive systems as well as digital data tape systems, nearly 60 percent of Western Digital’s production takes place in Thailand, while the fourth biggest hard drive producer, Toshiba, has about 50 percent of its capacity in the country. “We estimate that our regular capacity and possibly our suppliers’ capacity will be significantly constrained for several quarters,” Timothy Leyden, Western Digital’s chief operating officer, told analysts on an earnings call recently.

According to Western Digital’s President and Chief Executive Officer John Coyne, their organization, through the WD Foundation, has been making contributions and matching donations by its employees to support Thailand recovery efforts. The company has earmarked funds to the Thai Red Cross Society to distribute aid.

Time to move to the clouds?

This may be the big boost cloud services needed to get more penetration in the security marketplace. According to Scott Harkins, president of Honeywell Systems, Automation and Control Solutions, some 26 areas of Thailand experienced flooding and this will have the largest impact ever on hard drive production.

"All hard drives for DVRs and NVRs come out of Thailand," Harkins told the audience at the First Alert Professional Dealers Convention last week in Scottsdale, Ariz. "There’s already been a major disruption in supply and there will be price increases. Suppliers won’t guarantee a price even one day, and because of this, availability of hard drives early in Q1 2012 and DVRs could be hard to find," he said. "Prepare your business for it," he added.

Optiview, a nationwide CCTV distributor and manufacturer based in Jacksonville, Fla., scrambled last week to purchase and stock as many hard drives as they could to prepare for their customer’s needs in the coming months.

"Our customers need hard drive storage for their security solutions. So we have done everything we can to prepare for this shortage. We even drove all over the city and bought every hard drive on the shelf that people would sell us," said Dave Page, president of Optiview.

"We paid double for these drives but we’ve got to have them available for our customers," he added.

CCTV dealers like Optiview have raised their hard drive prices in response to the additional cost. Optiview is also limiting the number of hard drives that may be purchased with each DVR to one or two drives (depending on the size of the DVR).

"We are recommending to our customers that they purchase the least amount of hard drives per DVR that they can get the job done with. In a few months the prices should come down again. Then they can install more hard drives in the DVR when it’s more economical to do so," Page added.