COP is predicting that the price of many of their competitors DVRs will rise heavily to incur the costs of inflated HDD prices.
With Thailand experiencing the most extreme flooding in generations, component manufacturers have been especially hard hit. This in turn has had a huge impact on hard drive manufacturers in particular.
About a quarter of all hard drives are manufactured in Thailand and it appears that all major vendors will be affected in some way.
With a global HDD shortage looming, higher prices are likely to damage margins down the entire chain, providing no relief for suppliers hit by low prices, lower margins and the recession.
Extreme flooding
Recently Western Digital announced that its hard drive production facilities in Thailand were shutting down due to the extreme amount of flooding.
WD’s facilities in the Bang Pa and Navanakorn industrial region outside of Bangkok were heavily water damaged.
Western Digital previously said that it may see a revenue decline of about 60% in the current quarter and some reports suggest WD will be able to produce only half of its planned quota of hard disk drives.
Damaged supply chain
COP Security sales and marketing executive Gareth Rhodes says its HDD manufacturer Seagate has been operating its own factories at full capacity since the beginning of the disaster and hasn’t reported any flood danger.
“However, this doesn’t mean they’ve been spared in any way,” Rhodes said. “For them, the problem is a damaged component supply chain which is becoming a bottleneck since many manufacturers of the hard drive components have been affected by the floods.
“So with the hard drive production being affected so heavily, what does this mean for the consumers? We run the possibility of seeing high prices and limited availability at one the most important times of the year.
“Many installers, end users and competitors will see HDD, Flash Memory and DVR prices rise as the crisis continues. Some companies have estimated a price increase on HDDs between 15-50% which in turn will be passed on to the DVR distributors.
“All of the COP Security team offer our deepest sympathies to everyone affected in the Thailand flooding crisis.”
DM holds off surcharges
Meanwhile Pauline Norstrom, Director of Worldwide Marketing at Dedicated Micros, said: “Despite the upward demands on pricing due to the worldwide shortage of hard drives, we understand the pressures that our customers are under, so have committed to hold off adding any surcharges to all Dedicated Micros DVR/NVR products which contain HDDs, through to the end of November.
“We will review the situation every week thereafter and will provide a further update if the situation changes.”
Products covered by this commitment include the Dedicated Micros range of Hybrid DVRs/NVRs and Enterprise Video Servers.
