Lenovo Group Ltd, the world's No.2 PC maker, said on Wednesday that it expected some constraints on hard disk drive supplies through the first quarter of next year after severe floods in Thailand crimped global supply.
Asia's PC makers have been suffering from a double whammy of an expected weak demand during the year-end holiday season and concerns over components shortage in coming months as the floods submerged Thailand's industrial parks, analysts said.
Lenovo is still assessing the full impact, but does anticipate some constraints on the availability of hard disk drives (HDDs) as a result of the flooding in Thailand, the Chinese PC maker said in an emailed statement.
Lenovo, which ranks behind Hewlett-Packard Co in global PC rankings, said it had enough hard disk drive supplies for now, though supply could be tight going forward.
In the near future, we expect to begin seeing supply constraints as a result of this industry-wide problem, a situation that likely will last at least through the end of the year and into the first quarter of 2012, as HDD manufacturers and their suppliers work to recover production capacity.
Earlier in the week, Taiwan's Asustek Computer Inc also said it had enough inventory to last through the end of the fourth quarter, in line with analysts expectations.
The PC demand in Q4 is not that strong anyway, so I think we should be okay. And Q1 is traditionally sequentially down from Q4, said Kirk Yang, an analyst at Barclays Capital in Hong Kong.
Thailand has been hit by its worst floods in five decades, killing at least 373 people since mid-July and disrupted the lives of nearly 2.5 million.
Seven industrial estates in Ayutthaya, Nonthaburi and Pathum Thani provinces bordering Bangkok have been closed, causing billions of dollars of damage, disrupting international supply chains for industry.
The Southeast Asian country is the world's No.2 hard disk drive maker, with top makers Seagate Technology Plc and Western Digital Corp having factories there.
Analysts said hard disk drive prices faced upward pressure in coming months, though PC makers should be able to absorb some of the costs.
It's very similar to after the Japanese earthquake. This is always an opportunity for the suppliers to use as an excuse to raise prices, Yang said.