Seagate Technology has reportedly notified its prospects abouts its plans to lift costs on new laborious drive orders and for calls for that exceed prior agreements, echoing an identical transfer by Western Digital, which elevated its costs earlier this month. These adjustments are available response to a surge in demand for high-capacity HDDs and constraints in provide attributable to decreased manufacturing capabilities of each Seagate and Western Digital, stories TrendForce.
According to business insights reported by TechNews, the sector anticipates that the shortage of high-capacity HDD merchandise will persist all through the present quarter and probably lengthen over your entire yr. It is forecasted that HDD costs will rise by 5% to 10% in Q2 2024 alone and will enhance additional as a reault of the continuing challenges confronted by the storage business.
The main driver behind Seagate’s choice is elevated demand for high-capacity HDDs, that are used to coach AI fashions. This demand spike, coupled with a discount in manufacturing output from laborious drive makers, has created a major supply-demand imbalance. As a end result, Seagate has determined to regulate their pricing technique to handle the state of affairs. Further exacerbating the difficulty are international inflationary pressures which proceed to inflate prices throughout the board, which additionally contributed to the corporate’s choice to extend costs, Seagate stated in a message to shoppers printed by TrendForce.
Seagate emphasised that its lowered manufacturing capability has been a serious problem, hindering the corporate’s potential to satisfy buyer calls for totally and promptly.
“As a result, we will be implementing price increases effective immediately on new orders and for demand that is over and above previously committed volumes,” the alleged memo from Seagate reads. “Supply constraints are expected to continue and as such we anticipate that prices will continue to increase in the coming quarters.”
Earlier this month Western Digital additionally knowledgeable its prospects about value hikes for its HDD and SSD merchandise. This notification was based mostly on comparable points — larger than anticipated demand throughout the entire product vary and extra provide chain challenges affecting the electronics sector. Western Digital’s announcement made it clear that these disruptions are more likely to proceed, prompting additional value changes.
Sources: TrendForce, TrendForce, TechNews
