Are you finding computer component prices expensive? So get ready: at least SSDs will be able to grow more. And all this because Western Digital detected a serious problem involving the storage of its components.
The company notified the market that 6.5 billion gigabytes of flash memory were contaminated in its facilities, making its use impossible. This means that, for example, components for more than 50.7 million 128GB SSDs have molded.
The number is astronomical, and in assessments by the analysis company TrendForce, it could mean a significant increase in prices for the industrial consumer, and even for the final consumer, in the coming months. This is because the tendency is for WD to compensate for these losses by increasing the price of its inputs. Classic case of supply and demand.
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The problem was detected in January, and notified to partner companies, such as Toshiba. The latter is responsible for the storage memory of iPhones, iPads and Macs. Until then, neither WD, it, or Apple has formalized the detection of problems in devices already released. So there’s no need for a recall — for now.
Problems for Apple?
Estimates show that Western Digital accounts for 30% of the NAND/SSD memory market share. The hit in its production could be significant throughout 2022. And one concern is that, by table, its partners increase device prices if the value of inputs goes through an increase.
As contradictory as it may seem, despite Apple being heavily dependent on Western Digital thanks to Toshiba, it is one of the companies that could suffer less impact in the short term. This is because the company closes long-term contracts well in advance. So, for example, memories for the iPhone 14 can already be guaranteed at an already negotiated price.
For the future, however, it is possible that the inputs will cost more for Apple. And then it remains to be seen whether Tim Cook will be able to equalize the budget of the devices with the current retail price, or if this will affect the pricing of smartphones.
In any case, the TrendForce analysis is a projection. Western Digital has not said whether it will increase its prices for its customers. But as this is a business-to-business negotiation, the terms, if they change, are unlikely to be widely publicized.
