Natural disasters are flood, hurricane, volcanic eruption, earthquake, etc and they lead to financial, environmental or human losses. Governments, International Relief Organizations and Businesses across the globe develop and implement Disaster Management and Response plans to minimize losses in terms of human, financial and environmental. Natural disasters cannot be controlled and the only way is to try and predict and prepare for the disaster. Businesses and Governments before setting up factories and plants take into account the natural disaster vulnerability of the areas. There is no escape from the natural disasters and most of the times the losses are so huge it takes years to recover from them.
Natural calamity risks are assessed based on the historical data available about a particular geographical area. Natural disasters have caused major losses and recovery from such a disaster requires huge resources in terms of human, financial and infrastructure. Natural disaster cause lot of emotional damage to the people affected. There has been some major disaster in the recent times like Earthquakes in
hurricane Katrina in US, Indian Ocean Tsunami etc. These disasters have caused
significant losses and people, businesses and governments are still struggling
to overcome. Turkey
Technology Research Firm’s View:
According to research firm IHS iSuppli, HDD shipments in the fourth quarter will decline to 125 million units, down 27.7% from 173 million in the third quarter, resulting in an increase in price of about 10 percent compared to third quarter prices. Disruption to shipments is not expected in 2011 as there are sufficient stockpiles to last through the fourth quarter but the shortage could impact notebook PC production in the first quarter of 2012. Digitimes Research reported that the flood will create a 12% HDD supply gap in the 4th quarter of 2011 and the gap may increase into 2012 and estimates the 4Q11 hard disk drive shortage to reach 19 million units. For detailed charts please click here: Digitimes Research Charts
Gartner currently estimates that 50 million HDDs will be taken out of the planned 180 million-unit 4Q11 production runs, and there may be an additional 50 million HDDs taken out of the projected 175 million-unit build plans in 1Q12. According to IDC, major part of PC production for the fourth quarter had already been shipped and it expects the negative effect of the flood on PC shipments to be limited to 10% lower than earlier expectations. For the first quarter of 2012, the firm expects total PC shipments to be slashed by more than 20% from previous forecasts.
Seagate's hard drive and component assembly factories in
not submerged, but manufacturing has been curtailed due to external component
supply constraints. It now expects to report a total production of 41-45
million hard drives for its December 2011 quarter, compared to the 48.9 million
in the fourth quarter of 2010. Samsung, Hitachi Global Storage Technologies and
Toshiba are also affected by Thai floods. Thailand
All Western Digital's hard drive and component manufacturing facilities in
have been shut down since the week of October 10. Company expects its hard
drive shipments during the December quarter will be 22-26 million units in
contrast to the 58 million units shipped in the September quarter. Company
expects the suspension of its operations in Thailand Thailand
and that of some of its suppliers will continue into the March quarter and
possibly beyond and is exploring alternatives to maximize existing capacity in
other locations, including its Malaysian hard drive assembly facility and a
third-party slider fabrication facility in the . Philippines
Original Equipment Manufacturer’s View:
Drive prices have increased 20% since the flooding started .Dell has warned its revenues could be hit by a worldwide shortage of hard drives and warned that the company may have to raise computer prices as HDD prices rose. Lenovo believes it can source enough hard drives to meet customer demand and try to manage the cost situation with minimal impact on profitability. Samsung and Acer have said that PC supplies will be lowered due to shortage of HDDs and subsequently prices will rise. For NetAPP, low hard-disk drive production, and revenue growth is slowing and difficulty in forecasting revenues and big impact will be felt in second half of 2012. Goldman Sachs lowered its expectations of Microsoft Windows revenue for both 2011 and 2012.
Viable Options for Industry
Current scenario is not expected to improve till March 2012 and supply constraints of HDDs will lead to rise in prices. To improve supply to certain extent HDD manufacturers are trying to move production capacity to their plants in other countries and
Malaysia and manufacturers
can increase production. Increase prices of the products and pass on the
increased cost of HDDs onto the consumers. Another suggestion is adoption of
Solid State Drives in place of HDD. But SSD are very costly right now and there
is still couple of year’s time further for its adoption. These are the viable
options for the manufacturers and OEMs until the scenario improves in second
half of 2012. Manufacturers and OEMs are not scared and are confident enough to
tackle the situation which highlights the preparation that businesses have to
tackle such disasters. China
- How to improve Natural Disaster Risk Assessment and predict their affect on production facilities?
- How to prepare for and tackle the production shortages due to Natural Disasters?
- How to prepare for the business losses that arise and how to tackle and survive?
- What lessons are to be learnt from Thai Flooding?