Western Digital agrees hard drive prices won't drop until 2013

[Larry-G]

Western Digital executives expect hard drive production, which took a hit thanks to flooding in Thailand last year, to return to normal levels in the second quarter of 2012, reaching retailers some time in the following quarter.
Prior to the floods, Thailand was home to multiple hard drive manufacturing plants, including the single largest drive spindle manufacturing facility in the world.

The comments, from Western Digital CEO John Coyne and COO Timothy Leyden, came during the company's quarterly earnings call with analysts yesterday. Coyne indicated the company doesn't expect retailers to reach pre-flood inventory levels until some time in 2013.

During this time he sees demand outpacing supply in reaction to current shortages. This mirrors the thoughts of Seagate CEO Stephen Luczo from last November.

Leyden provided additional details. He said that while Western Digital's assembly capacity has returned to normal, they are limited by the availability of crucial components. Specifically, he said, there is a shortage of sliders, which are an essential part of the read/write head assembly in a hard drive.

In order to avoid the current situation in the future, he also says they are duplicating some of their Thai production in neighboring Malaysia. They are also working with suppliers on similar moves.

On top of that, Western Digital will be augmenting a flood wall planned by the Thai government "with company-specific initiatives."

http://www.afterdawn.com/news/article.cfm/2012/01/24/western_digital_agrees_hard_drive_prices_won_t_drop_until_2013