The price of hard-drives is falling fast. According to Digitimes hard drive quotes in Taiwan at the end of June dropped 10-20 per cent compared to levels seen at the beginning of the second quarter.
Fortunately for the manufacturers they have not been making enough of the gear since the second quarter of 2009 causing quotes to remain at a high level until the second quarter of 2010. Europe's bond crisis has now started affecting PC demand, and manufacturers are adjusting their shipment forecast downward for the third quarter. This helped relieve the shortage of hard drives and even turned the market status to over-supply, and now it seems that hard drive makers started reducing their prices.
Capacities over 500GB at the end of June had an average drop of about 20 per cent compared to the beginning of the second quarter, while 250GB and 320GB capacities had an average drop of about 10 per cent.
Digitimes expects hard drive shipments will remain at levels seen in the second quarter, though previous years had generally seen strong growth in this time frame. The numbers of hard drive suppliers worldwide has been reduced to just five players. This makes it unlikely that a price war will happen this year which will give the industry time to become healthier.