Hard-drive shortage updates from Seagate, Western Digital and EMC (NYSE:EMC) confirmed reports from solution providers that large storage vendors have greater access to supplies than smaller vendors. Solution providers and storage vendors also noted that enterprise hard drive supplies are more constrained than desktop drive supplies. The hard-drive shortage stems from severe floods in Thailand that wiped out nearly one-third of the world's hard-drive manufacturing capacity.In the wake of the flood, NetApp, Hitachi Data Systems and EMC all recently unveiled plans to raise hard-drive prices by up to 15 percent this quarter.
Seagate Tuesday reported its second fiscal quarter 2012 revenue and profit and said that for the quarter it shipped a total of 47 million hard drives, down 4 percent compared to the same period last year. The 47 million drives included 700,000 that were shipped by Samsung in December after Seagate closed its acquisition of Samsung's hard-drive business.
Of that total, 6.4 million were enterprise-class drives, including 4.3 million drives for mission-critical server and storage applications and 2.1 million drives for business-critical applications. This was down about 10 percent vs. the 7.1 million enterprise drives Seagate shipped in the same period last year, which included 4.8 million drives for mission-critical server and storage applications and 2.3 million drives for business-critical applications.
Seagate, however, shipped 37.7 million desktop and mobile drives in the second fiscal quarter of 2012, up nearly 20 percent from 31.5 million client drives shipped a year ago.
Seagate's shortfall resulting from the Thailand floods was rather limited, as the company's relatively few assembly lines there were not as impacted. The company therefore suffered mainly from a shortage of components from flooded parts makers.
Contrast that to Western Digital, where Thailand facilities accounted for the production of about 60 percent of its total hard-drive production. Western Digital's Thailand production was abruptly halted due to the floods and is only now starting to ramp back up.
Western Digital President and CEO John Coyne said during his company's second fiscal quarter 2012 financial conference call last week that he does not expect production for the entire industry to return to normal until sometime in mid-2013, according to a transcript of his presentation at the Seeking Alpha Web site.
Western Digital CFO Wolfgang Nickl said on the call that the company shipped a total of 28.5 million hard drives during the second fiscal quarter of 2012 vs. 52.2 million drives in the year-ago quarter. Of those shipped in the last quarter, more than 3 million units were manufactured in the prior quarter.
Average selling price for Western Digital drives was approximately $69 per unit, up $22 from the year-ago quarter, Nickl said. OEM sales accounted for 59 percent of total revenue, up from 45 percent from last year, while distribution channel sales accounted for 25 percent of revenue, down from 33 percent last year. That indicates a heavier emphasis on OEM storage and server customers than in the past.
Joe Tucci, EMC chairman and CEO, said last week during EMC's fiscal year 2012 financial conference call that the Thailand floods have had a major impact on the disk drive industry, and that enterprise drives were more impacted than desktop drives...