Hard drive disruption to persist through 2012

Seagate chief says that analyst proclamations of a rapid recovery are nonsense.
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Seagate CEO Stephen Luczo has warned that the hard drive industry will continue to be impacted into 2012 "until the end of 2012 at least", according to a Business Week report.

While Seagate has been less directly affected by the flooding that has hit manufacturing facilities of rivals Western Digital and Toshiba, Luczo revealed that Seagate drives were assembled from parts from around 130 suppliers, many of which are flooded.

Luczo also said that many of the suppliers in Seagate's supply chain are smaller family run businesses that provided highly specialised components such as industrial molds and chemicals. Even major parts manufacturers like motor-maker Nidec have been severely hit and went so far as to send in divers to recover equipment in order to begin manufacturing elsewhere.

Some of Seagate's customers, presumably PC makers struggling with inventory, had moved to secure supply with one even offering $250 million up front. Luczo said the firm could raise prices by 40 per cent in the current market and Seagate's stock price has already doubled since the flooding began.

However the Seagate chief said that he was limited price rises to 20 per cent but only for those that committed to one to three year contracts.

Referring to the ongoing drive shortages, Luczo said: "People are going to appreciate the complexity of this business."

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