The global production capacity of hard disk drives (HDDs) will increase to 140-145 million units, about 80% of the level before flooding hit Thailand in late 2011, in the first quarter of 2012, according to industry sources.

HDD makers exhausted their inventories of products and components in December 2011 and January 2012, the sources indicated. However, HDD vendors have not hiked quotes due to the off-season.

Among HDD vendors, Hitachi Global Storage Technologies and Seagate Technology have suffered less damage from the flooding and therefore have moved faster in restoring production capacities, compared to Toshiba and Western Digital, the sources indicated.

The global HDD production capacity dropped from 175 million units in the third quarter of 2011 to a bottom of 120-125 million units in the fourth quarter due to the flooding and then began to rise along with restoration efforts, the sources said. Global HDD output is expected to increase to 160 million units in the second quarter of 2012 and further to the original level before the flooding in the third quarter, the sources added.

Due to increased costs of components and materials, HDD prices are likely to rise 30-40% from the level before the floods by the end of 2012, the sources indicated.