Thai floods will submerge a 4 million drop in PC shipments

THE FLOODS in Thailand will spark a nearly four million unit shortfall in PC shipments for the first quarter of next year.

According to IHS Isupply, hard disk drive shortages caused by the flooding in Thailand will result in a 3.8 million-unit shortfall in PC shipments in the first quarter of 2012 compared to the previous IHS forecast issued in August.

As a result, global PC shipments are now expected to increase by only 6.8 per cent in 2012, down from the previous outlook of 9.5 per cent growth.

Total PC unit shipments in 2012 are forecast to amount to 376 million, compared to the previous prediction of 399 million. IHS said this is partly due to the HDD shortage as well as weakening demand due to other factors.

IHS said that worldwide PC shipments in the first quarter of 2012 will amount to 84.2 million units, compared to the earlier forecast of 88 million.

The firm said the bulk of the reduction in PC shipments will be in the notebook market, which is the area impacted by the HDD shortage. Notebook PC shipments in 2012 now are expected to rise by 10.1 percent, down from the previous forecast of 13.8 per cent growth.

"The PC supply chain says it has sufficient HDD inventory for the fourth quarter of 2011. However, those stockpiles will run out in the first quarter of 2012, impacting PC production during that period," said Matthew Wilkins, senior principal analyst of compute platforms for IHS.

However, IHS said that starting in the first quarter of 2012 the HDD supply situation will begin to improve. It will take time, however, to replenish the supply chain, with overall HDD industry supply expected to meet demand only by the end of the third quarter of 2012. It added that the fact that the major HDD suppliers have shifted production to locations outside of Thailand will help ease the shortage situation.

PC shipments should rebound from the HDD shortage in the second half of the year. Still, total shipments for 2012 will fall short of previous expectations because of economic factors and rising competition from tablets.

IHS added that "ironically, the HDD market could face an inventory surplus by the end of 2012, after facilities in Thailand return to full production". This means that when combined with the added production outside the country, the recovery in Thailand's HDD operations could result in excess supply. µ