Storage update: Tracking price weakness in higher capacity drives

USA: Presenting Converge's Market Intelligence Report, August 2009.

3.5" Drives
According to Converge Market Insights, in July's Market Insights, we reported that prices were eroding for the 500 GB capacity. Over the last several weeks, the 750 GB and 1 TB capacities have joined this occurrence, with open market pricing in the low $50 range and low $70 range respectively.

This is in contrast to 750 GB pricing in the $70–$75 range and the 1 TB capacity at $90–$95 only two to three months ago. On the positive side, pricing for the lower-capacity HDDs has remained stable month over month. Overall, demand remains strong for this period of the year.

2.5" Drives
The predictions of growing demand and shrinking supply are beginning to take shape in the 2.5" market. We are tracking significant volume requests for SATA HDDs in the 160 GB to 320 GB range.

Meanwhile, pricing is becoming more volatile day to day. The service space remains active as well, with part number–specific requests for the aforementioned interface and capacity range. We expect this trend to continue for the balance of the quarter.

Similarly, demand for the IDE interface has not weakened. However, activity in this interface appears to be more excess supply and cost savings driven.

Storage update: Lower demand and excess inventory erode 500 GB 3.5" drive prices

3.5" drives
USA: According to Converge Market Insights, there has been some price erosion in 500 GB through 1TB 3.5" HDDs since our last update. This is not due to a drop in contract prices, but is a result of lower demand coupled with excess opportunities in the marketplace.

Meanwhile, demand for 160 GB, 250 GB and 400 GB has remained steady, with pricing unchanged month over month. This is true of both the SATA and IDE interface. Currently, only $2 to $3 separates the 160 GB from the 250 GB capacity.

However, the difference between the 250 GB to the 400 GB level, the price jumps over $10 to the high-$30/low-$40 range. Lastly, we are still seeing liquidity in 40 GB, 80GB and 120 GB IDE HDDs.

2.5" drives
While market analysts continue to speak about shortage and allocation when discussing the 2.5" market, we have not experienced a significant impact yet. We believe this will change in the near term, but for the July/August time frame, availability is expected to remain unchanged month over month. As stated previously, this is particularly true of, but not exclusive to, the SATA interface in the 160 GB through 320 GB range. Finally, activity in lower-capacity 2.5" IDE HDDs remains strong. This pertains to 20 GB to 80 GB capacities in both the 4200 RPM and 5400 RPM speeds. Pricing levels for these drives have not changed since our last report.