Supply chain analysts say that reduced competion and ongoing costs of the relocation of production are to blame.

Hard drive prices elevated until the third quarter

Supply chain analysts IHS iSuppli said that hard drive production will not return to annual growth until the third quarter.

The firm’s memory and storage research unit said that the recovery of hard drive manufacturing was well under way but that prices would "remain inflated" with inventory remaining depleted. iSuppli said that demand is exceeding supply at and will do for much of the year.

One of the reasons that prices will remain high, iSuppli revealed, is as a result of "costs associated with the relocation of production" as well as higher component costs given the broad impact across the supply chain.

The analysts also red flagged reduced competition on the back of the "megamergers" of Seagate and Samsung as well as Western Digital and Hitachi.

"IHS expects the HDD industry could hold prices higher than pre-flood levels for a few more quarters because there are fewer competitors in the market," they said.

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