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Hard drive manufacturers Seagate Technology and Western Digital have reported great financial results after such a prolonged hard disk drive “crisis.”
There was always talk about the fact that hard disk drives are so cheap, that the profitability of the manufacturers is getting low enough to limit the R&D investments they would otherwise make.
Many industry insiders were talking about overstocking and lowering profits. The situation was bleak.
One year ago, Samsung wanted to get rid of their HDD division, despite the fact that the products developed there were quite good. The F1 and F3 lines of desktop HDD are very good performers to this day, and they’ve been since way back in 2008.
Seagate jumped at the opportunity and snatched Samsung
’s hard drive division for almost 2 billion dollars, back in April 2011.
Hitachi was also doing quite alright. They had good mobile HDDs and the very successful 1000.C hard disk drive line that excelled when dealing with multi-threaded work. Still, the marketplace for HDDs was so difficult that they’ve announced they’ll be selling their hard drive division to Western Digital.
The Thailand flood came and went and we were left with the hard drive “crisis”. While the hard drives were almost never “out of stock” the prices increased even by 300%.
Months passed by, but there seemed to be no end to the hard drive crisis, despite the fact that both manufacturers were announcing the restoration of the plants affected by the waters.
In a report from earlier his year, we found out that Seagate even managed to increase its HDD shipments with around 2% when compared to the previous year. Where exactly was that “crisis?”
Now Seagate proudly announces it has decided to spend 2.5 billion dollars to repurchase a considerable amount of its outstanding ordinary shares. Spending 2.5 billion dollars less than a year after buying Samsung
’s HDD division for another 2 billion doesn’t really seem like a company “suffering” from a “crisis.”
Western Digital, too, has just announced its fiscal third quarter financial results. Despite recently acquiring HGST (that’s Hitachi’s HDD division) in March last year and also “suffering” from a “difficult crisis,” they’ve made a net income of 146 million dollars, or 62 cents per share. "Our third quarter performance demonstrates the potential of the new Western Digital, with just three and a half weeks of HGST results combined with the standalone WD business,"
said John Coyne, CEO of Western Digital.
By their reasoning: bad market plus low margins plus the HDD crisis equals big profits.
Good job if we may say. We finally have a humongous duopoly in the hard drive market too. This is probably the most desirable situation for the end-users paying 300% more money for last year's technology.
We shall now wait and see when the prices go back to where they were one year ago, if ever.
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|Comment #1.1 by: Not possible on 03 May 2012, 09:04 GMT|
Ouch! You send "please" on the cartel! Received this message but it is was created automatically! With Your "please" will be made next speculation of prices;)
|Comment #2 by: Khan on 28 Apr 2012, 02:19 UTC|| reply to this comment|
Nice work man.
Yes hdd crisis was fake and in my view they will never decrease the price up-to one year. May be after one or two years they decrease the price.
|Comment #2.1 by: Sandip on 22 Jun 2012, 08:07 GMT|
The so called 'Crisis' started somewhere around October 2011 and its close to 9 months now. I doubt if they are ever going to decrease prices
|Comment #3 by: ChromeShine on 28 Apr 2012, 04:36 UTC|| reply to this comment|
Ever lower prices on SSD mean your old spinner is going to be cheaper, and then gone, one fine day...
|Comment #3.1 by: Right! on 07 May 2012, 11:24 GMT|
That's why the divisions are sold in the first place.
|Comment #4 by: ar on 28 Apr 2012, 07:39 UTC|| reply to this comment|
of course , and this kind of news never reach the main stream media and none care or realize this was all a scam.the same will happen with the memories. i will not buy another hard disk till go low as at least 5% more expensive of the original price. thanks for expose this things Constantin Murariu
|Comment #5 by: Try_being_in_the_industry on 28 Apr 2012, 16:52 UTC|| reply to this comment|
Ok, have you tried ordering enterprise hard drives lately? There is a shortage. Yes, prices on all drives got inflated and workstation grade drives are pretty easy to find. Try to get SAS drives and you're out of luck.
Thanks for basing your facts on how you can walk into Best Buy or Fry's and see some on the shelf that have probably been in their warehouse for 8 months.
|Comment #6 by: Anon on 28 Apr 2012, 17:51 UTC|| reply to this comment|
Crisis was real, price response was not real.
|Comment #6.1 by: No on 07 May 2012, 08:25 GMT|
The flood was real. There was no crisis because the HDD's still kept coming all the way. Price response was risky, tho good. Since if the customer is happy (= Seagate sells more than it used to) then why not charge as much money as possible? It's business and its for money for gods sake.
|Comment #7 by: PohTayToez on 28 Apr 2012, 18:37 UTC|| reply to this comment|
I'm not sure I understand your reasoning in this article. First of all, while the average consumer hasn't had issues finding hard drives, businesses definitely have. Large orders and orders for certain enterprise level drives were greatly delayed.
Second, the whole idea behind raising the price is so that they don't run out. Pretty basic concept of supply and demand.
Finally, why would they loose money? Seagate's manufacturing plants weren't even among those damaged, so of course their going to be selling more drives.
|Comment #8 by: JoeCool on 28 Apr 2012, 19:02 UTC|| reply to this comment|
WD suffered damage from the Thailand flooding. Seagate did not.
|Comment #10 by: Yoda on 28 Apr 2012, 20:58 UTC|| reply to this comment|
Idiots, it doesn't make any sense to fake a crisis to increase prizes in a free market! Heard of supply and demand? If people buy the products the prize is per definition not to high. It's not like people MUST have harddrives to survive, it is not a human right lol.
|Comment #10.1 by: pazsion on 01 May 2012, 01:29 GMT|
what are you talking about, not a human right? Where are we gonna keep all our opinions, articles, research and personal data? Not on an ssd of any sort. much too small and too slow. Human rights support technology. It doesn't exclude it. That means we have the right to a pc and free flowing internet, without data caps and overinflated priceing,. without undue censorship or malicious attempts to hide or misguide the truth. facts or alter reality from what it was or is. Music, movies and data submitted to the internet....are all there to be shared openly in their original form with credit provided as such. Shareing is not piracy. Don't want it shared freely...don't put it on a pc connected to the internet, and certainly don't upload it anywhere. Copying anothers work and making it seem as though another created it originally is however a copyright infringement. And rightfully should be prosecuted as such. And nothing more...
|Comment #10.2 by: pazsion on 01 May 2012, 01:34 GMT|
oil companies do it all the time. Don't let a "natural" disaster go to waste...exploit it fully. Grab people by their feet and shake...if nothing falls out...arrest them. And put them to work on an oil rig/field.
|Comment #11 by: Bast Hotep on 28 Apr 2012, 22:11 UTC|| reply to this comment|
I've been thinking along these lines for awhile. Problem is that SSD prices have been going down and their capacity has been going up...so if the HDD makers don't get off their high horse, they're going to have to start dumping old inventory because by now we should be seeing 5 TB drives for $120 and nobody will want the 2 TB ones for $175.
|Comment #12 by: HDD on 28 Apr 2012, 23:34 UTC|| reply to this comment|
This is complete * and utter sensationalism. You should be ashamed of yourself as a "journalist." 25% of the worlds slider supply (a key hdd component) was underwater for months. Seagate didn't get its sliders from this source and weren't impacted as much as WD.
|Comment #13 by: lithodora on 29 Apr 2012, 02:07 UTC|| reply to this comment|
I will not be purchasing another HDD till the prices fall to what they were... and I do need several terabytes worth, but wait I will.
|Comment #14 by: ilikebike on 29 Apr 2012, 05:10 UTC|| reply to this comment|
Western Digital lost 60% of their manufacturing capabilities and $1 billion in revenue due to the floods. Seagate's supplies were constrained and demand didn't slow (and still hasn't).
Seagate has been the benefactor of the floods but their prices rose in response to constraints in the entire supply chain. WD is still in the red from the floods and to say that the whole thing was a profit move is a little ridiculous.
|Comment #15 by: Mike on 29 Apr 2012, 06:29 UTC|| reply to this comment|
the prices have come back down to almost exactly what they were 1 year ago....
|Comment #16 by: Jack on 29 Apr 2012, 09:07 UTC|| reply to this comment|
As with many things originating in Asia, another fake.
I was about to make an investment of nearly 100k of bare drives just before the crisis and that has now been postponed indefinitely, as I'm certainly not paying "hostage" prices.
Will we ever see prices drop? Who knows. Grudgingly, perhaps. Eventually. I'm no longer holding my breath, or rather, I'm now waiting for SSD.
|Comment #17 by: Cantora on 29 Apr 2012, 09:47 UTC|| reply to this comment|
Working for the largest solution provider in Australia I can confirm 100% that IBM, HP & Dell all suffered critical shortages on HDDs duringthe blackout.
Distribution agents in Australia had little to no stock of all enterprise level SATA HDDS (1TB,2TB & 3TB) for several months.
All the stock that would normally be allocated for Australia was shipped to the US and UK instead.
I would not be at all surprised if those figures showing that Seagate shipped +2% was specific to one country, due to it taking stock from other countries.
We did pay a lot more and no one is happy about that, however to avoid critical stock drops Seagate, WD & Hitachi had to increase their prices and of course, like any smart business, turned a disaster in to a major profit for them.
I am not happy about that and I do not support a business turning a disaster in to a profit but they did what they had to do to stop their shares from crashing. Smart business.
|Comment #17.1 by: Ludak on 07 May 2012, 18:17 GMT|
And who is to tell that WD and SG didn't withhold drives from distributors on purpose so they could inflate the price by creating demand with false "shortage"? They can just decide not to sell 100% of SAS drive production and only sell 20% and stockpile the rest until demand reaches the point at which they can raise prices by 200%. Dell and HP just suffer like the rest, they want to buy, WD doesnt want to sell under excuse that they don't have. So instead of selling 100 units for 1000$, they sell them 20 units for 500$. It's good business.
|Comment #18 by: Drive guy on 29 Apr 2012, 14:55 UTC|| reply to this comment|
Server hard drives were completely out of stock during that time frame. All major distribution channels were completely dried up for at least a solid month. My business was hurt because we had server orders that couldn't be filled. The crisis was very real. That said, I'm sure the companies use the crisis to their advantage.
|Comment #19 by: z3r0_k00l75 on 30 Apr 2012, 03:23 UTC|| reply to this comment|
Figures it was something like this. Now I am expecting ram manufacturers to do the same thing.
|Comment #20 by: king on 30 Apr 2012, 18:49 UTC|| reply to this comment|
I wont purchase this * segate HDD untill they give 3 years warranty or reduce the price , I like to buy WD HDD
|Comment #21 by: Mrcool on 30 Apr 2012, 20:01 UTC|| reply to this comment|
Since there's only 2 real players. Who knows they could be price rigging.
Too bad SSD's aren't further along.
|Comment #22 by: pazsion on 01 May 2012, 01:36 UTC|| reply to this comment|
I thought WD seagate, samsung and hitachi...were all owned by seagate in some form...you can buy all these from seagate directly.
|Comment #23 by: pazsion on 01 May 2012, 01:42 UTC|| reply to this comment|
Also, IF there were already enough HDD's to supply every citizen who owned a pc x4...In stock... Who bought up all the HDD's?? If you've been following gold,silver,copper etc. It also suggests a huge electrical project. But by whom? And where? consumers aren't demanding this or buying it...who is?? china??
|Comment #24 by: Grant on 01 May 2012, 09:22 UTC|| reply to this comment|
Wait till China will release their HDDs...
|Comment #24.1 by: borhan48 on 01 May 2012, 17:31 GMT|
Well Said my man.
|Comment #25 by: abigail on 02 May 2012, 09:51 UTC|| reply to this comment|
they must be get very high profit after this case, PLEASE LOWER UR PRICE DAFUQ
|Comment #27 by: mymyreally on 07 May 2012, 07:57 UTC|| reply to this comment|
Fear-mongering worked for the Nazis during the WW2, its working for the US currently, certainly works for Fox news. There's huge profit in it. It's not going to stop, only accelerate. Its the new business model.
|Comment #28 by: AccyK on 07 May 2012, 08:27 UTC|| reply to this comment|
I'm really confused about where the number in the article referred to as WD's $146 million in net income came from. According to WD's latest SEC filing (an 8-K), the number $146 million only appears in reference to April 2011 net income, which was before the flooding, and also happens to be negative after taking depreciation and taxes into account. Why didn't the article use the more recent March 2012 net income? At any rate, it doesn't really look like we'll know the full picture financially until WD files its annual 10-K covering the periods where the flood actually had an effect.
|Comment #29 by: JAF on 07 May 2012, 09:12 UTC|| reply to this comment|
Doesn't this violate U.S. Anti-Trust laws?
|Comment #29.1 by: Jinxed on 26 May 2012, 05:17 GMT|
One would think so, but really, hard drives are hard drives, so as far as consumers are concerned, two big companies (WD and Seagate) is enough competition in a market where products can only be so different.
As for the SAS/enterprise market for HDD, that's a whole different story in itself.
|Comment #30 by: Zds on 07 May 2012, 09:15 UTC|| reply to this comment|
This article is a fake. WD and Seagate financial results for Q4/11 clearly show a dent in shipments and profits. Just the fact that they are recovering now does not mean the manufacturing issues were fake.
|Comment #30.1 by: Constatin Murariu on 07 May 2012, 09:57 GMT|
Please give me those 2,5 billion dollars worth of Seagate shares they're buying now and those 700 million dollars worth of dividends WD is paying their shareholders this month and I'll let them keep the 4.2 billion dollars they've paid for Hitachi and Samsung's HDD factories. :)
|Comment #30.2 by: Jinxed on 26 May 2012, 05:22 GMT|
Only by increasing it's prices has Western Digital manged to stay afloat, and the fact that WD was able to give the money they did to their shareholders is only a testimony of how good of a company they are under hot water, not proof that the manufacturing plant that was INDEED flooded on that terrible day, not flooded at all.
(For extra points, spot the two puns in the above paragraph)
|Comment #30.3 by: Constantin Murariu on 28 May 2012, 06:28 GMT|
You should really read this :
The thing is that there is no way they could spend 7 billion dollars in CASH if they would have been so badly hit.
Besides, the crisis is FAKE not the floods.
The floods were real, but both Seagate in WD had huge stocks, enough to last them a whole year, but they've increased the prices anyway, using the flood as a pretext.
|Comment #31 by: Guglielmo on 07 May 2012, 09:46 UTC|| reply to this comment|
Sounds like the Chip crisis of 1999... completely fabricated BS to increase profit margins at least on a temporary level. Vote with your wallet! Find another vendor, pay a little more, and teach these companies a lesson!
|Comment #32 by: Turboturas on 07 May 2012, 09:49 UTC|| reply to this comment|
Aha. This is good news. Now we just need to stop buying their crap to show how bad it is to lie.
|Comment #33 by: Aissen on 07 May 2012, 10:07 UTC|| reply to this comment|
Duopoly ? There's still Toshiba in town, and they could play a card. (So yeah, it's a triopoly, not much better, but it's worse in the CPU business…)
Also, the shortage *was* real. Did they maximize the throughput in order to satisfy everyone as soon as possible ? That's not sure.
|Comment #33.1 by: Aries1470 on 26 May 2012, 15:09 GMT|
Yep, I agree. Everyone is forgetting Toshiba :-(
It is a Triopoly... but who's counting.
On the other hand, Toshiba have a monopoly now on the 1.8" HDD after Samsung pulled out a couple of years ago.
At this point in time, I can not comment on quality of HDD compared to SSD for long term use, except that if you disconnect a HDD and reconnect it after a couple of years, you still have your data (if no mechanical problem), but for a SSD, try leaving it unpowered... NO DATA after a very long time. You need to occassionaly connect power to them to retain their information.
Now, all sing along, it is not two companies, but three, Seagate, Toshiba and Western Digital that make HDD today and have their own Fab's.
|Comment #34 by: andrew on 07 May 2012, 10:23 UTC|| reply to this comment|
Wow one of the biggest BS articles I've ever seen. Look at WD profits. Look at Seagates profits. See a difference? Seagate wasn't affected by the floods, so of course they're going to take advantage of the prices. They'd be ludicrous not to.
|Comment #35 by: Linniex on 07 May 2012, 10:50 UTC|| reply to this comment|
Im not sure how that is faked ... Where thenplants flooded or not?
|Comment #35.1 by: Constantin Murariu on 07 May 2012, 12:32 GMT|
Flood - real.
Crisis / Shortage - Fake / Artificial .. just to make it appear they don't have overstock from before the floods and triple the prices.
If they would have been selling each drive right from the factory door, do you think the price for a 1 TB drive would have fallen to 50$ last year ?
The prices fell because there was overproduction and profit margins were dismal.
When the floods hit, they had stocks to last well after the repowering of the factories.
|Comment #36 by: roman on 07 May 2012, 11:50 UTC|| reply to this comment|
Samsung HDD are verrrrrrrry incomparable with other 2, they are simply weak. I gave up after 2, 1TB SpinPoint and 250GB, my bro looose also one 500GB, so we never ever more buy next Samsung. You buy Samsung if is problem you loose data, they give you next one and circle is close, again and again... But who give you back your data, unique photos of your family, friends etc. This are stills of your life just lost. My Seagate 250GB works good and I hope it will be like that. Think twice before buying Samsung HDD. Here in Poland we called it s...sung.
|Comment #36.1 by: Constantin Murariu on 07 May 2012, 12:28 GMT|
Fortunately for me and my friends, we were happy with our F3 drives.
After Seagate shipped this winter and spring ALL the drives they were manufacturing with no quality check, we started to call them something similar :)
Every day when buying close to 100 HDDs from Seagate we had at least 5 or 6 DOA and, in the first two or three weeks after shipping the server, we usually got other returned drives from our customers.
I think that the overall failure rate was around 10 or 12 percent this winter. Seagate tripled the prices and shipped every drive they were manufacturing with no regard for their customers.
Or, at least, that’s the impression the situation left on us.
|Comment #37 by: Kris on 07 May 2012, 14:04 UTC|| reply to this comment|
Intel, Micron and Samsung with they SSDs will crush this industry with two to five years.
|Comment #38 by: lanceton on 07 May 2012, 16:48 UTC|| reply to this comment|
don't think if they're ever gonna do anything as long as there's no antitrust investigation happening
|Comment #39 by: OU812 on 07 May 2012, 23:45 UTC|| reply to this comment|
QUIT MILKIN IT ALREADY !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
just another d-bag nickel n diming their customers
|Comment #40 by: Smokin_Gunns on 07 May 2012, 23:47 UTC|| reply to this comment|
isnt price fixing illegal ????????????
|Comment #41 by: Alan on 10 May 2012, 12:14 UTC|| reply to this comment|
It sounds like like the petrol crisis... the price never goes back down after... lol
|Comment #43 by: Theonewhowins on 17 Jul 2012, 02:40 UTC|| reply to this comment|
Im glad I purchased my HDD right before the floods when I got 1TB for 45$ on amazon. Then that HDD died 8 months later and I was forced to pay 6$ to ship it to western digital where they originally claimed they would pay most of the shipping due to a "partnership" with UPS... Either way 51$ overall is nothing compared to 90-95$ for the same unreliable western digital green drive today. In the end they sent me a refurbished 1TB Western digital blue with 32mb cache (note my green drive had a 64mb cache if it really makes a difference)
|Comment #44 by: Poet on 09 Aug 2012, 14:09 UTC|| reply to this comment|
This is possibly the worst case of sensationalism that I have read outside of the political arena.
|Comment #45 by: noel on 07 Jan 2013, 06:37 UTC|| reply to this comment|
Can somebdy plz help to find a good 1 TB External HDD?? Toshiba, Seagate(China made) or WD (Thailand) ?? This enquiry is from UAE..
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