Seagate Believes HDD Supply Disruption to Continue in 2012

While the company was able to ship 47 million drives in Q4, the company warned analysts that the damage will result in further shortages. In 2012, the industry will not be able to supply hard drives with a total capacity of about 100 exabytes, Seagate CEO Stephen Luczo said. Based on the average capacity of shipping hard drives today, that translates to about 150 million units, according to the company.

The company noted that seven of Seagate's top 10 suppliers "suffered direct factory damage" and all product platforms "experienced some form of supply interruption." Luczo stressed that "a large portion of the precision machining capability that support the hard drive industry  the motors and base decks to actuators and specialty mechanical parts, were catastrophically lost." Still, the production is ramping up again and "over 200 requalifications have occurred for motor base assemblies alone," the executive said. The impact increased the average unit cost for Seagate by $2.50.

At this time, Seagate is somewhat pessimistic that the HDD industry can catch up with demand anytime soon. "We believe the impacts of the flooding are going to be felt well into 2013 in terms of trying to address the needs of customers to acquire storage," Luczo said during the earnings call with analysts.

For Q4, Seagate reported revenues of $3.2 billion and a net income of $563 million.

Create a new thread in the UK News comments forum about this subject
This thread is closed for comments
Comment from the forums
    Your comment
  • ibboard
    Prices went up for Seagate by $2.50? From what starting point? And why does that translate into a £30 500GB HDD spiking to well in excess of £80?

    Yeah, I'm sure there were problems (which could have been mitigated by not having all of your suppliers in the same damned area!) but the conspiracy side is whether they're making it sound worse than it is and carrying it on longer than necessary to keep prices inflated.
  • Rusting In Peace
    Seems legit...
  • mahatmacoat
    Indeed , this is all about keeping prices up. This used to happen with memory, back in the 90's...that was about mysterious fires in key component factories.

    Seagate and other drive makers, can all make more money by having lower production costs and keeping prices high.

    Make less, get paid more. A great boon for them.