Australian PC assemblers could face severe hard drive shortages in the last quarter of this year as a result of dramatic cutbacks in global production over the last 12 months. One senior drive vendor executive told ARN last week that local assemblers should be now committing themselves to suppliers or risk missing out at their market sweet spots in Q4.
After launching a new range of 4.3GB-per-disk high performance hard drives that can be built in a range of capacities from 4.3 to 17.2GB, Phillip Adams, director of Australian operations for Maxtor Disc Drives, said the worldwide supply of IDE desktop hard drives has been in decline through 1998.
He said Q4 is traditionally "a major build quarter" for large northern hemisphere PC manufacturers and they will be allocated most of the quarter's production.
"They (global PC vendors) are now ramping up and there is going to be a very bad allocation period for Australian customers across the board in Q4," said Adams.
"We hit October last year with a huge oversupply and price erosion situation," Adams continued. "As a result, there has been a culture developing in Australian marketplaces over the last 12 months that you never commit yourself because prices will continue to drop.
"This is not going to continue and that's going to scare the living daylights out of a lot of assemblers. Across all the major vendors -- except Maxtor, which has been ramping up production -- the amount of drives supplied is massively less than it was this time last year," he said.
"I'd even go as far as saying there is anything up to 20 per cent less production across the industry. Availability is going to be tight at the market sweet spots and you will see a big allocation period this quarter right across the industry.
"It's almost too late because production is mostly already locked up by major manufacturers."
While resellers ARN spoke to said they were not experiencing problems at the moment they all agreed it is a crucial area of assembling they need to keep very close tabs on.
Timothy Strachan, national PC sales manager for assembler Total Peripherals Group said he would not be surprised if there was shortage of hard drives that are in high demand at the consumer level.
"It's possible," he said. "The computer industry is notorious for having a shortage of one component or another at any time. There always seems to be something in short supply -- whether it be memory, monitor tubes, hard drives or CPUs.
Strachan said the Australian market accounts for only about 2 per cent of global demand and commitment to hardware component suppliers was dangerous as sweet spots change very rapidly. He said there would always be something that is available even if it was not the first choice.
Maree Lowe, director of OEM assembler Anabelle Bits, said she wasn't foreseeing any problems with hard drive supplies but it is the sort of issue that assemblers have to be very careful about.
"We normally only have one production shift at this time of year, but we are currently running two, so a shortage of drives would be a problem," said Lowe. "If suppliers go into an allocation period it definitely affects us and in the past we have had to go offshore to source components.
"We are not hearing there is a shortage," she said, but added the situation will be closely monitored.
Jack Zhong, managing director of assembler TodayTech, agreed there has been some shortage of popular drives from the two suppliers he uses. A bigger player such as TodayTech can overcome this situation pretty well, he said.
"There will be some shortages in the market, but we don't expect it to become critical," Zhong said. "It is the small players that will be affected, not the main players."