© yuriy-chaban-dreamstime.com General | December 09, 2011
Seagate leaves a bad taste?
Seagate's auction approach to pricing during the HDD shortage won't win them any friends in the future, says a source within the industry.
It's been a busy time for everyone within the HDD market. Teams have been working 14 to 15 hours a day in the recent wake of unprecedented flooding in Thailand. These floods, of course, have wrecked havoc on the HDD market, where Thailand produced roughly 45 percent of the worlds supply in the first half of 2011. An industry insider, who asked not to be named, has said it isn't just this immediate impact of the flood that's evident – the initial panic, prices that rose 25 percent per day – but the potential long term effect of manufacturer reactions to the event. The behavior of companies like Seagate and Western Digital in today's tough times, suggests the source, will impact how OEMs will deal with them in the future. To put it another way, the short-term impact of the floods is important, but what happens in six to eight months time, when the water recedes and is replaced by some form of normalcy, that's worth thinking about too. This could be worrisome for Seagate. ”Western Digital is probably worse off (than Seagate) and they are sitting there trying to do the best they can to continue to do business. But Seagate, where they are playing the auction approach – whoever is going to pay the most money is going to get the product, publicly coming out and saying that - has left a real bad taste in many OEMs mouths right now,” explained the source, who works within the industry. ”We are going to dissect this business and, when it is all said and done, you are going to see the OEMs do the same,” the source continues. “With our meetings we've had recently with some major OEMs - they are not going to forget. I've heard on numerous occasions that the way that Seagate is playing this, (OEMs) are not happy”. While selling to top bidder has won Seagate a larger market share today, the source claims, it could end up hurting them when supply levels are back to normal. ”OEMs are doing business with (Seagate) because they have to right now. Once everything is back to normal, I feel that they are going to lose a lot of market share for that”. Seagate did not comment directly on this article, however a representative from the company pointed me towards two of the most recent public statements the company has made on the flooding in Thailand. In one of the statements, an interview with AllThingsD, CEO Steve Luczo discussed the price situation in the wake of the flooding. “...since spring of 2010, the price erosion has been higher than normal, which would show that supply is greater than demand. And what this flood has done is drive the supply curve down, while the demand curve has stayed constant. For OEMs , you’re seeing an average increase of about 20 percent, and in the channel [resellers who sell parts to smaller PC and server vendors], probably much higher. So all the sensational quotes you see about pricing are about those that occur in the channel, where we have no control whatsoever”. For Luczo, the problem seems to be with channel supply, not OEMs. Seagate is attempting to drive down prices, he said, but the shortage naturally creates price increases. “...at the OEM there will be shortages in some high-value areas like enterprise storage or cloud computing. You’re going to have to see price increases, because there’s such big shortages”. Analysts predict that deliveries will ramp up in March, with prices stabilizing in Q2. It's not until Q3 that prices are going to come back down to levels before the floods. It will be interesting to see what happens then.
Sypris Electronics tapped for NASA project Sypris Electronics LLC has been awarded a contract from Collins Aerospace in association with NASA’s Orion Spacecraft project.
NexLogic eyes implantable med-electronics NexLogic Technologies Inc. has announced its entry into assembly and manufacturing of implantable medical devices, a rapidly growing segment in the medical electronics market.
International Wire Group buys Owl Wire and Cable International Wire Group (IWG) has acquired New York-based Owl Wire and Cable from Marmon Holdings Inc.
ZF to set up third research and development centre in China ZF Friedrichshafen AG is establishing a third Chinese R&D centre in Guangzhou southern China. Representatives of ZF and the local authorities have signed an agreement and ZF plans to invest approximately EUR 90 million in the new development center.
Semiconductor market suffers another plunge in Q3 With revenue plunging by a gut-wrenching 14.7% in the third quarter, the global semiconductor market appears destined for a year of double-digit decline, despite some signs of growth in the critical memory segment, says IHS Markit.
Ericsson to pay $1B to resolve US corruption investigations Swedish telecom company Ericsson has reached a resolution on U.S. FCPA investigations by the the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC).
Bel acquires CUI Inc. power assets Bel Fuse Inc. has closed on its previously-announced deal with CUI Global for the majority of the power business of its subsidiary, CUI Inc.
Accel Robotics more than quadruples initial funding San Diego-based start-up Accel Robotics has announced a USD 30 million Series A funding round led by SoftBank Group Co.
General Motors, LG Chem partner in Ohio General Motors and LG Chem have announced plans to form a joint, equally-owned company to mass-produce electric vehicle battery cells.
Swissbit opens electronics production facility in Berlin Swissbit has been manufacturing in Germany since 2002 and has now official opened its new electronics production facility in Berlin.
Revenue ranking of global top 10 IC design companies The newest analysis from TrendForce shows that several U.S.-based IC design companies experienced continually expanding losses in 3Q19 revenue because of the ongoing China-U.S. trade war and because Huawei had yet to be removed from the Entity List.
Mycronic receives order for an upgrade of a Prexision system Swedish production equipment specialist, Mycronic AB, has received an order to upgrade a system to a full-scale Prexision 8.
Kurtz Ersa inaugurates new extension buildingin Asia Kurtz Ersa Asia Ltd. celebrated its 15th anniversary in China and at the same time opened its extension building in Zhuhai.
Clover Wireless acquires Teleplan Illinois-based Clover Wireless has acquired Teleplan International N.V., a global electronics supply chain services and solutions provider.
FLIR Systems, Providence Photonics finalize deal Oregon-based FLIR Systems has completed its strategic investment in Providence Photonics, developers of advanced software used to quantify invisible gas emissions using FLIR optical gas imaging (OGI) cameras.
Lucid Motors sees EV facility groundbreaking Lucid Motors has officially begun phase-one construction of its EV manufacturing facility in Arizona, representing an investment of more than USD 300 million.
Precogs’ CEO: ‘If we can’t help you, it won’t cost you’ The business model of Precogs, the company that has created a global marketplace that connects a buyers ERP with component distributors, is quite intriguing; you will only pay out of what the company can save you.
Cre8tek invests in robotics to increase efficiency and quality Danish-Chinese electronics manufacturer, Cre8tek, has recently invested in added automation in the shape of robots; which are currently moving into the company’s production plant in Shenzhen with the aim to increase efficiency and quality.
Global semiconductor sales increase 2.9% MoM in October The Semiconductor Industry Association (SIA) today announced worldwide sales of semiconductors reached USD 36.6 billion for the month of October 2019, an increase of 2.9% from the previous month's total of USD 35.6 billion, but down 13.1% compared to the October 2018 total of USD 42.1 billion.
Standex International buys Torotel Inc. Standex International Corporation and Torotel Inc. have reached a definitive agreement for Standex to acquire Torotel for approximately USD 48 million in cash.
SPEA unveils new digs in Chandler, Arizona SPEA, a provider of in-test equipment for electronics, semiconductor, MEMS, and sensor industries, has opened a new office in Chandler, Arizona, in the metropolitan area of Phoenix.
SUSS MicroTec, BRIDG team up on NA applications center SUSS MicroTec has announced a broad collaboration agreement with BRIDG, a Florida not-for-profit microelectronics fabrication facility with 200 mm (8-inch) wafer fab capabilities.
Universal adds software center in Bratislava Universal Instruments has extended its EMEA capabilities with the addition of a Software Center in its Bratislava, Slovakia corporate facility.
Sono Motors launches community funding campaign The German mobility provider Sono Motors launched one of the biggest community funding campaigns in Europe yesterday. The company’s campaign target is to generate EUR 50 million between now and December 30, 2019, with preorders from existing and new supporters.Load more news