WD: Thai flood effects to continue to 2013

Western Digital (WD) expects hard disk drive production to return to full capacity by September 2012, but for the supply chain to remain constrained through to June the same year.

The storage giant painted an uncertain picture for the computer industry throughout 2012 as it aims to restock depleted inventory in conjunction with the launch of Windows 8 and more Ultrabooks, some of which will run both solid state and hard disk drives.

"With the expected uptick in demand in the back half of the year, rollover demand from the current shortages and inventories throughout the supply chain at record lows, from component supplies, system manufacturing and distribution and retain channels, we believe the pipeline will not be refilled to normal levels until the first half of calendar 2013,"  John Coyne, WD's president and CEO said at its second quarter 2012 fiscal earnings. 

In the December 2011 quarter WD estimated that the industry shipped 119 million units, with 11 million units coming from inventory.  

WD itself shipped 28.5 million hard drives in the December quarter, about half the 52.2 million the same time last year, while the average selling price for hard drives rose from $US22 last year to $US69 this year, WD chief financial officer Wolfgang Nicki said.   

Coyne confirmed that HDD prices would not return to pre-flood levels, even when WD had reached pre-flood production capacity, but claimed it would be a "moderate difference", according to a Seeking Alpha transcript. 

The PC vendors most affected by WD's operations are Acer and Dell, each making up more than 10 percent of the HDD company's revenues.