Hard drive prices showing rapid decline

Prices of popular 1TB and larger hard drives have dropped from the highs generated by last month's 'panic buying' spree

After drifting into the stratosphere last month, hard drive prices are now experiencing significant decreases. If you absolutely have to buy a hard drive today, the good news is you can expect to pay 30 to 40 percent less than the nosebleed fare just a month ago. And you can probably pick up 5 or 10 now, where quantities were much more constrained in November.

The floods in central Thailand in October wiped out more than 25 percent of worldwide hard drive production -- at least for a couple of months. Western Digital, hardest hit of the manufacturers, said it would take five to eight months to bring production facilities back up to speed. As recently as mid-November, the president of the Electronics and Computer Employers' Association told Reuters, "The earliest should be two months from November. That means some factories may be able to restart part of their flood-hit plants in early January."

Thanks to a wee bit of engineering ingenuity and incredibly hard work by local staff, the Western Digital plant in Bang Pa-In -- which was under 6.5 feet of water in mid-October -- started running again on Nov. 30. Per Western Digital President John Coyne, "The passion, perseverance, ingenuity, and execution exhibited by the WD team has enabled us to make substantial progress in partially restoring our operations in Thailand, well in advance of our earliest expectations."

Western Digital raised its quarterly sales estimate from $1.25 billion up to $1.8 billion. The 80 percent jump was due in no small part to the huge demand for hard drives -- some would call it "panic buying" -- rock-bottom production estimates generated during the flood, and prices that would make any accountant blush.

Western Digital stock went up, and the price of hard drives went down.

An example: The Camelegg chart, which tracks prices at Newegg, shows the Western Digital 2TB Caviar Green Western Digital20EARS hit a low of $69.99 just before the flood. A month later, on Nov. 10, it had soared to $249.99 -- an increase of 250 percent. Today the drive sells at Newegg for $162.99, which is 35 percent less than it cost a month ago. The pricing trend is clearly down -- although how far down and how fast are points of conjecture.

Another example: Camelegg shows rival Seagate's 2TB Barracuda Green ST2000DL003 went from $69.99 on Oct. 15 to $229.99 on Nov. 1. It's now down to $169.99, and Newegg will sell you 20 of them at a time.

Newegg isn't the only retailer showing significant, rapid price decreases. Some of the lesser-known hard drive retailers are seeing even steeper declines.

The problems in Thailand aren't over, but the brunt of the flooding has passed. The death toll stands at more than 600, and hundreds of thousands of people have lost their homes and their livelihoods. Cleanup is under way in Bangkok. Local and international aid groups are out in force. The Thai people are amazingly resilient and resourceful -- and they're showing their true mettle in these trying times. If you want to help, contact your local Rotary Club, or send me mail through the Rotary Club of Patong Beach, Phuket, Thailand, at treasurer@rotarypatong.org.

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