> When the Drive Crisis started, industry pundits estimated that the hard drive market would take anywhere from 3 months to 1 year to recover. No one guessed two years. Was the delay simply an issue in rebuilding and/or relocating the manufacturing and assembly facilities?
This is a typical response in all markets that are commodities (or approaching commodity status). Once makers have had an excuse to move prices up, they want to hold onto the extra profit for as long as they can, so prices are fast to rise, but slow to fall.
The most direct effect can be witnessed in gasoline prices. Notice how a news report that a camel farted in the desert of Saudi Arabia results in the price of gasoline at your local station rising by 25 cents a gallon (or more) nearly instantly. Even though the gas in the underground tanks was the same gas (at the same cost to the station) that it was 15 minutes ago.
But then, it takes weeks before that 25 cent increase goes away when no more camel farts occur over those same weeks. Same effect here, just with hard drives rather than gasoline.
Six months after the Thailand drive crisis, drive prices "peaked" at about double their earlier prices and began falling. Just about then, an article came out featuring a bunch of panic inducing quotes from a Seagate VP loudly claiming it might be a year before they could get enough drives made, shortages would be terrible. It felt so disgusting to me, none of it was true, the VP was just trying to encourage pre-buying and drive hoarding to artificially pump sales.
This is a typical response in all markets that are commodities (or approaching commodity status). Once makers have had an excuse to move prices up, they want to hold onto the extra profit for as long as they can, so prices are fast to rise, but slow to fall.
The most direct effect can be witnessed in gasoline prices. Notice how a news report that a camel farted in the desert of Saudi Arabia results in the price of gasoline at your local station rising by 25 cents a gallon (or more) nearly instantly. Even though the gas in the underground tanks was the same gas (at the same cost to the station) that it was 15 minutes ago.
But then, it takes weeks before that 25 cent increase goes away when no more camel farts occur over those same weeks. Same effect here, just with hard drives rather than gasoline.