Counting the cost of the floods in Thailand

The recent flooding in Thailand might pose significant global implications to the video surveillance market. Thailand produces approximately one quarter of the world’s supply of hard disk drives. As much of Thailand’s manufacturing and storage facilities are disrupted by flood water, the question is: how will this affect the video surveillance market?

10/31/2011


IMS research: excellence in market intelligneceThe recent flooding in Thailand might pose significant global implications to the video surveillance market. Thailand produces approximately one quarter of the world’s supply of hard disk drives (HDDs), not to mention a large proportion of HDD components. As much of Thailand’s manufacturing and storage facilities are disrupted by flood water, the question is: how will this affect the video surveillance market?

With Toshiba and Western Digital temporarily closing HDD manufacturing facilities, and Nidec Corp. suspending operations in four of its six HDD components factories in Thailand; the probability of a major shortfall of HDDs is looking increasingly likely. This means companies such as Western Digital and Seagate could struggle to meet demand.  Furthermore, there is limited stock in company inventories of HDDs due to challenging global economic conditions.

Companies who supply HDDs within video surveillance devices, such as digital video recorders (DVRs), may absorb a slight price rise, while companies who do not supply HDDs with their storage products are not likely to be directly affected. Distributors and system integrators who install HDDs in DVRs and other storage devices are also likely to be affected.  They could absorb any price increases narrowing their profit margins, but will probably pass on any price increases to the end-user. 

Users of lower capacity storage products could see a slight increase in price, but many users are unlikely to identify the price increase. Therefore, the lower end of the market will not be significantly affected. The effects of a price rise in HDDs could be more prominent within the enterprise class storage market. An increase in price on an already higher cost system will have a greater multiplier effect. As a result, enterprise customers could delay or temporarily scale down the size of their installations.

Considering the historical pricing pressure in the HDD market, the price of video surveillance storage solutions could stabilise rather than increase. 

Should prices in traditional HDD based storage products increase significantly end-users may look to alternative storage solutions, such as video surveillance as a service (VSaaS) or solid state drive (SSDs). However, the price of both VSaaS and SSD is prohibitive and along with specific technological barriers, such a bandwidth restrictions, it is unlikely that such storage solutions displace HDD based storage products.

As for the legacy of the flooding in Thailand, it is likely that there will be no severe long term effects. What will be interesting though is the race to secure HDD production and supply. An ‘act of God’ has seemingly re-shuffled the pack, but it is still too early to suggest how the dynamics of the HDD market will change in the next six to twelve months.



The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
Doubling down on digital manufacturing; Data driving predictive maintenance; Electric motors and generators; Rewarding operational improvement
2017 Lubrication Guide; Software tools; Microgrids and energy strategies; Use robots effectively
Prescriptive maintenance; Hannover Messe 2017 recap; Reduce welding errors
The cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Research team developing Tesla coil designs; Implementing wireless process sensing
Commissioning electrical systems; Designing emergency and standby generator systems; Paralleling switchgear generator systems
Natural gas engines; New applications for fuel cells; Large engines become more efficient; Extending boiler life

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
Featured articles highlight technologies that enable the Industrial Internet of Things, IIoT-related products and strategies to get data more easily to the user.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
Maintenance Manager; California Oils Corp.
Associate, Electrical Engineering; Wood Harbinger
Control Systems Engineer; Robert Bosch Corp.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me