Hard disk shortage drives up PC prices

Hard disk prices have doubled for some PC manufacturers following the floods in Thailand.

Floods hit the tech manufacturing hub last week, shutting down factories that make hard disks and other tech components.

PC Pro's A List hard disk, the Samsung Spinpoint F3 1TB, was £49 before the floods, and has since jumped to £109 including VAT at Dabs, while Overclockers is selling it for £99 with VAT.

Farooq Ahmed, director of Arbico Computers, said over the past few weeks, a 500GB drive jumped in price from around £23 to £65, a 1TB has leapt from £33 to £80, and Ahmed has seen prices top £100. He said 2TB hard drives were £45 to £50 before the floods, £100 earlier this week, and are now between £120 to £130.

"It's up everyday," he said, noting prices are going up at a rate of about £5 a day this week. "People are trying to make as much money out of it as possible."

"I've never seen a shortage like this before in any component, except higher-end graphics," he said.

For hard drives, he said his suppliers are not expecting any stock for the next two to three months, with short supplies for up to the next six months.

"We've had to increase prices [for PCs] by £40 in the last week and a half," Ahmed said. "If we don't, we're selling at a loss."

Tight margins mean there's simply no room for PC makers to absorb such costs, with Ahmed saying his firm is "lucky" to get a 10% margin on a PC, with some bringing in only 1% or 2%.

Ben Miles, a spokesman from Chillblast, reported a similar situation. He said prices for a 2TB drive have gone from £45 ex VAT to over £200 this week. "It's just gone absolutely insane," he said.

"There's a fair amount of profiteering and suppliers that do have stock," he added.

He said Chillblast has already had to raise prices on all systems except those it's contractually required to keep the same - and on those it's making a substantial loss.

Miles said his firm normally keeps two weeks' worth of hard disks in stock, but has bought up enough for two months to ensure customers receive their orders. "It's more stock than we've ever had, and we paid a monstrous amount for it," he said.

The problem isn't only affecting UK manufacturers, with Acer saying the floods would hurt its revenue next quarter, and prices would have to increase.

“The whole PC production chain is stuck at a bottleneck,”said Acer CEO JT Wang, according to the Financial Times. "This is not a problem that we can solve by ourselves and so we have started raising prices” of PCs, he added.