According to the CEOs of Seagate and Western Digital, two of the leading hard drive manufacturers in the world, they have finally been able to bring production back up to pre-flood levels, meeting – and even exceeding – consumer demand. What this means for pricing is still up in the air.

Effects of the Shortage

While hard drives themselves jumped massively in price on the consumer level, desktop and laptop prices held fast, at least for a short while. The products of large companies were mostly unaffected thanks in part to bulk agreements already in place with hard drive manufacturers as well as their ability to absorb increased costs. Apple’s MacBook line, for example, remained at the same price throughout the shortage.

Other companies, such as Lenovo, were hit much harder by the shortages. For a while, Lenovo simply didn’t have the hard drives available for some of their 750GB, 320GB, 250GB, and 160GB models. Their product prices didn’t necessarily go up, but many consumers had to settle for “off-spec” options.

What the Analysts had to Say

Going into December, which was the worst point of the shortage, stories were abuzz about how long the effects of the shortage might be felt. Some analyst firms, like IHS in particular, were fairly optimistic, expecting a gradual improvement starting as early as the first quarter of 2012. IHS even predicted that the added focus in production outside of Thailand could even result in an excess supply.

Other firms were much less optimistic, some claiming that the higher prices may even persist into 2013. It was thought that the soonest hard drive manufacturers would be able to meet immediate demand would be sometime in the second half of 2012.

The Current State of Things

As we mentioned earlier, the major players of the hard drive world have stated that they’ve already been able to meet the current demand; however, the two hard drive leaders don’t particularly agree on how things will play out from here.

Seagate’s CEO Steven Luczo is playing it safe (or perhaps taking advantage of the more pessimistic analyst reports), stating that there is still “a substantial and growing shortfall in unmet Exabyte demand resulting from the supply –chain disruptions caused by the floods.” In short, he plans on keep Seagate’s net gains high (they actually grew during the shortage).

Western Digital’s John Coyne had a different story to tell. He told analysts that “the recovery activities related to both WD operations and those of [its] supply chain partners impacted by the Thailand floods have reached a point where [Western Digital] now [has] the capability to adequately meet anticipated customer demand in the current quarter and beyond.” Western Digital was hit the hardest by the floods, so the fact that they have caught up with demand already is very good news. Hopefully WD gets its way, and prices will return to normal quickly.

Thailand is host to many key factories and manufacturing plants for companies like Toshiba, Western Digital, Sony, and Nikon (just to name a few). All of these companies have had to halt production in Thailand due to flooded facilities which has led to product shortages for this holiday season. Some products have been hit harder than others, and fulfilling Christmas lists this year may be difficult.

Hard Drives

Hard drives have been the most affected by the floods. Nearly every major hard drive manufacturer uses Thailand facilities extensively and there have since been reports of worldwide shortages. Even though you can still find them on shelves, the effects of Supply and Demand are very clear.

Back in October, before the flooding became severe, high capacity external hard drives could be found for well less than $100, but have since skyrocketed closer to $200. The 2TB Western Digital Elements Desktop hard drive is a perfect example. In October, you could buy it at a mere $89, but with news of the flooding and shortages, it promptly jumped to $150 and then $180. To make matters worse, most retailers have started limiting hard drive purchases to one per customer. Internal hard drives and laptop drives are affected as well.

All is not lost, however. Solid State Drives have been largely unaffected by the flooding. The problem with Solid State Drives has always been the price, typically $1-$2 per GB compared to $0.04 per GB of a traditional hard drive. But the Solid State Drive market has become increasingly competitive, bringing prices down. Per GB, they are still considerably more expensive than Hard Drives, even at their currently inflated prices, but you also get considerably more performance.

Digital Cameras

Also hit quite hard are digital cameras, especially digital SLRs. Nikon’s entry-level SLRs, the D3100 and D5100, have become hard to find. Its high-end D7000 is experiencing shortages as well. Sony, though, has certainly been hit the hardest. Having just launched its new NEX and Alpha series cameras, there were very few on the market to begin with. The flooding has rendered these new cameras almost impossible to find. The NEX-7, one of the most highly anticipated cameras of the year is nowhere to be found and likely won’t be available until early next year.

Laptops

Most laptop manufacturers do not rely on Thailand facilities to assemble their products, but a few, like Toshiba, do. The hard drive shortage is affecting the laptop market the most. With the increased demand, laptop manufacturers have had to pay more for their hard drives as well, resulting in higher prices down the line. Overall, laptops haven’t been hit that hard, with typical price hikes only around $60 to $90. Many of the larger companies, like Dell and Apple, can afford to absorb these costs themselves.

With all of these abrupt price hikes, it’s wise to research the price history before making any big purchases, especially when buying a laptop. As for hard drives, with their prices so high and availability so sparse, you may want to consider waiting for the market to return to normal. Even though they don’t feel quite as personal, gift cards are a great alternative for those items that just aren’t available. And consider keeping with the holiday spirit and contributing to the relief efforts in the flooded regions.