Western Digital warns of continued HDD shortages

January 24, 2012 | 13:09

Tags: #flooding #hard-drive #hdd #thailand

Companies: #hgst #wd #western-digital

Storage specialist Western Digital has warned that its production levels will continue to suffer as a result of the flooding in Thailand until at least September, meaning buyers can look forward to several more months of inflated hard drive prices.

The news, which came as part of the company's Q2 financial results, will be a blow for those holding off on upgrading their storage systems in the hopes of prices beginning to fall.

'We have made substantial progress in restoring WD's manufacturing capabilities in the aftermath of the historic flooding in Thailand, and this is reflected in our second quarter financial results and in the resumption of our operations there,' claimed Western Digital's president and chief executive officer John Coyne in a statement following the financial report.

'While much work remains to be done over the next several quarters to reach our pre-flood manufacturing capabilities, the progress thus far is significantly ahead of our original expectations and is a tribute to the dedicated and effective actions of our employees, contractors and Thai government agencies, the efforts of our supply partners and the support of our customers. We are grateful to all involved in this extraordinary effort.'

Although the company continues to ramp production in its Thai facilities, recently resuming slider production that had been on hold since the 10th of October, it will take until September this year for the company to fully reach pre-flood production levels.

Thus far, the company claims that the Thailand floods have cost it in the region of $199 million in charges and expenses, dwarfing the $14 million it has spent this quarter on its planned acquisition of rival storage manufacturer Hitachi Global Storage Technologies (HGST.)

Looking at the figures, it's easy to see the impact the floods have had on Western Digital's business: shipments were down to 28.5 million drives in the last quarter compared to a healthier 52.2 million in the same period last year, while net income dropped to $145 million compared to $225 million last year.

Despite production ramping, our advice remains unchanged: unless you're in desperate need of extra storage, try to make do with what you've got for a few months more if you want to get value for your money.

Are you shocked to see just how much of an impact the flooding had on Western Digital's bottom line, or just impatient for prices to drop back down to a sensible level? Share your thoughts over in the forums.
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