In recent weeks we have seen how the new cryptocurrency chia, which instead of being “operated” with GPU power is “grown” using storage devices, affects the hardware industry. The high demand for large capacity hard drives has forced some of the major hard drive manufacturers such as Seagate O DEO to maximize their manufacturing capacity, and are on the verge of reaching the tipping point where demand would exceed supply and there would be shortage, in this case the hard disks.
There are many effects that the Chia cryptocurrency is causing in the hardware industry: we have already seen how “farmers” have taken over stocks of large capacity hard drives in stores, causing some shortage with the rise. resulting prices, and we’ve also seen how the cultivation of this crypto ends the useful life of consumer SSDs in days with the issues that entail. Now the problem that arises is a potential shortage of hard drives as manufacturers already have their factories at maximum production capacity.
Seagate and WD, at most because of Chia
The demand for hard drives has increased dramatically due to the mining of the Chia cryptocurrency lately, which has resulted in shortages and price increases at retailers as we have already reported. Manufacturers Seagate and WD are now increasing the level of production of their high capacity hard drive models, increasing the utilization rate of their existing production lines in an effort to meet demand.
This raises several issues: On the one hand, manufacturers are ramping up the manufacture of higher capacity hard drives, leaving the lower capacity drives, which are the best sellers, a bit out of the way, which could potentially cause price loss. shortages of these. The second problem is that companies have limited options for increasing production in the short term as they currently have contracts that represent around 70% of their production capacity and none of them have said they have planned. build new factories.
This means that the Seagate and WD factories were already at 70% before the Chia boom, and now they have upgraded them. 100% production capacity to try to meet the demand. However, this raises the possibility that demand exceeds supply, which occurs in the semiconductor industry, causing a situation of shortage, the rising prices and the problems that come with it and that, again, we have already seen in the semiconductor industry.
The total global storage capacity allocated to mining in Chia recently exceeded 20 exabytes from 1 exabyte in April and shows no signs of stopping – quite the contrary. This means that the demand for hard drives for Chia has increased 20-fold in just two months, and it looks like the shortage will continue as both companies are happy to monitor the situation and take advantage of the surge in demand before releasing. decide on expansion plans. future in the coming years.
