There has recently been some discussion that some time late summer or early fall production of disk drives will be back to normal. What does that mean for the industry? Will prices go back to their pre-disaster amounts, or will they drop to where they should have been based on what we normally expect to happen with disk drive prices? Lots of people are asking these questions, as they are now planning their spending for third and fourth quarter this year. So here I go with a prediction on which I have nothing to base, but neither does anyone else, as the flooding was an unprecedented event in technology manufacturing history.
Once production for all vendors gets back to normal, the vendors that have been lacking production capability, and therefore lost market share, will work to gain that market share back. They will do so by cutting prices. The market will have a number of questions about the quality of the products and, needless to say, they should. Often, rapidly ramping production causes quality issues for any product in any market. If the quality meets the market expectation from the big storage buyers, then the price war will be on, with the new players to the market trying to rapidly gain back market share.
I suspect pricing will quickly get close to where it would have been without the flood, but that will take until early 2013 for the volume get great enough and all the buyers to be comfortable enough with the situation. With 4 TB drives on the horizon, it will not take long for the market to right itself and get back on track.
Expect everything, including prices, to be back to normal by January 2013, with prices starting to drop third-quarter 2012.