HDD Vendors Force Long Term Supply Contracts on PC Makers

Some of the major hard drive makers have begun demanding PC vendors sign long term supply contracts in an effort to maintain specific prices and shipping volumes in the wake of the Thailand flooding.

Initially the rampant floods massively impacted the hard disk drive (HDD) industry, causing huge shortages for a few select firms leading to price hikes for the hardware. The worst affected are beginning production once again, though it's expected to take several months before the hard drive market returns to normal.

With that in mind, HDD manufacturers are hoping to maintain steady pricing and volume purchases to help continue sales in a regular fashion. As production begins to ramp up again, it wouldn't be surprising if those with larger volumes dropped their prices to gain an advantage. However, with these new contractual obligations, the big PC makers will need to stay loyal.

Digitimes has it that the fourth quarter of 2011 will see a 30 per cent drop in shipped HDDs, with Q1 2012 hardly looking better. It's expected that it will see 140 million units of hard drives shipped, which is around 40 million less than the same period last year.

Another side effect of the HDD shortage has been the increased uptake of solid state drives. Since their prices are falling faster than the platter storage medium, SSDs are starting to become a common place boot drive in many an enthusiast's system.