Yet another self-fulfilling prophecy has come to pass, courtesy of the mass media.
Anyone who follows the news (especially technology news) will have heard about the floods in Thailand.
It would seem these events are newsworthy not for the infrequency, severity, or consequences of the events.
Indeed, flooding is common in Thailand, as well as other nearby countries and regions. Disruptions in basic services are also common, as are health problems, food and supply shortages, and their accompanying hardships on the people who live there.
Over one hundred thousand people have been displaced - a number roughly on par with the number of evacuees from the Fukushima area of Japan. I have not been able to find out how many facilities, factories and homes have been affected, nor what the impact will be to basic necessities and in terms of human suffering.
Oddly - or perhaps not so oddly - the media has chosen to largely ignore most of this. Perhaps flooding is too ordinary or routine an occurrence to be considered "newsworthy". Strange, since by some accounts this is the worst flooding in fifty years. It is likely that the total impact for the people is larger than Fukushima,
Instead, the media has decided to focus on the fact that a few hard drive factories have been shut down by the floods. Of course, it would seem this is a rather significant dumbing-down of the real situation for people unable to think for themselves.
In other words, never mind that several million people are affected. Never mind that various other kinds of industries have also been affected by the flooding. Never mind any kind of humanitarian crisis. Instead, let's create another Rice Panic of 2007 - another wholly manufactured situation where perception and reality bore no resemblance to each other.
Western Digital, Seagate, Hitachi and Toshiba are the top four HDD manufacturers in the world. It is undeniably true that both Western Digital and Toshiba operations have been affected as a result of the flooding.
Perhaps more worthy of note is that many companies manufacture hard drive components in those areas. Production of base plates, motors, suspension components, and other parts has been significantly affected.
This situation is akin to the Sumitomo epoxy factory fire in 1993, in which a factory that supplied some 60% of the epoxy used for ICs was destroyed. At the time, it was hyped as the "only" such factory in the world, lending the disaster a halo of epic proportions. Uncertainty reigned, even though there was a second supplier, as well as several companies in the field that had the potential to begin producing the required product.
In response, computer IC makers raised their prices significantly. They were no doubt having to compete with each other for a more limited supply of materials, with the natural consequence that prices would go up. The supplier or suppliers involved may also have taken advantage of the situation - all the market will bear, and all that. That is the free market system, and there is nothing wrong with it.
What was, and is, wrong with the situation is the misinformation being pushed to the general public around these types of crises. Certainly, global hard drive production will be curtailed for a while. But it is in the manufacturer's interests to get production back as quickly as possible.
First, not ALL hard drive factories are in Thailand. Thailand is actually #2 in output, next to China.
Western Digital has many major factories completely outside of China. It seems likely that one or more of these facilities could increase output. This might even be a fairly short ramp-up if there was excess capacity available.
Seagate has had no factories go down, nor has Hitachi. Seagate is #2 in the world right now, and so comprises a large proportion of total production.
Then there is the question of components. Examples cited include suppliers that provide about half of the total demand. That means there are others out there who supply the other half, and will be more than willing to fill in the gap.
Now, prices will definitely go up. It's inevitable. Logically, you would be looking at a 10-50% increase in price, depending on the situation.
But 200%? 300% No way. Yet that is what is happening.
I know for a fact that Seagate 1 Tb hard drives were just under $60 at Memory Express a few weeks ago. I know because I was worried they were going to be obsoleted before I finish upgrading my main server.
Today, the same drive goes for $160. Why? The answer is obvious - we're into the Great Hard Drive Panic of 2011.
Notwithstanding supply and demand, and the actual situation, HDD prices have rocketed to levels not seen for years. People are panicking - and over hard drives, of all things!
Fortunately the situation is self-correcting. People will stop overpaying for drives and PCs, and wait until prices drop again. To some extent, anyway. And only after the irrational panic that is driving the markets dissipates, which it will not do until the media and the general public get their heads straight.
And I suppose you can't blame the HDD makers. They're in it to make money, after all. If they can increase prices 300% over the holiday season, and people buy it, then good on them. It will mean they have more money to reinvest into getting their factories back into action.
But it is irritating. And here's a big fat raspberry to all the idiots out there who are paying these prices and keeping them high for everybody else. You idiots.
I'm left wondering who to get mad at. Economists? Business? But I'm still left with the media, for inventing crises where none really exist.
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