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Floodings in Thailand to affect hard drive supply chain
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Wednesday, October 19, 2011
The massive flooding in Thailand over the past few weeks could potentially lead to a shortage of hard disk drive (HDD) supplies in the fourth quarter and into 2012, according to market research firm IHS iSuppli.
IHS' forecast, developed before the Thai floods, calls for production of 176.2 million hard drives during the fourth quarter, representing 25.9% of annual manufacturing in 2011. IHS said it would likely downgrade its fourth-quarter production forecast in light of the impact of the disaster.
According to IHS, 25% of the world's HDDs are assembled in Thailand.
Western Digital Corp (WD) and Toshiba Corp have temporarily halted production of HDDs in Thailand, impacting a major portion of global hard drive manufacturing, IHS said. The companies operate HDD assembly facilities in Pathum Thani province near Bangkok.
WD, the world's largest HDD manufacturer in terms of volume, has 37,000 workers in Thailand, and production in the country accounts for 60% of the company's total capacity, IHS said. WD in the second quarter made 53.8 million HDDs, giving it a 32% share of the global market, according to IHS.
Toshiba employs about 3,900 workers in Thailand, and approximately 50% of the company's manufacturing capacity is in the country, according to IHS. In the second quarter, Toshiba was the No. 4-ranked HDD supplier, with 17.8 million units and a 10.6% share, according to IHS.
No. 2 HDD supplier Seagate has a head stack and head gimbal assembly (HGA) facility in Teparuk, Thailand, IHS said. The company also conducts slider, head assembly and HGA operations in Korat, Thailand. However, both facilities have remained operational following the disaster.
The floods, which have swept the country in the last two months, may have affected operations for the supplier of a key HDD component-the motor, IHS said. Nidec Corp supplies more than 70% of all global HDD motors, and all the major HDD manufacturers-including WD, Seagate, Hitachi GST, Toshiba, and Samsung-source motors from the company, according to IHS. Nidec has two subsidiaries in the Thailand: Nidec Electronics and Nidec Precision, both located in Ayutthaya, northwest Thailand.
Hard disk drive suspension assembly maker Hutchinson Technology also temporarily suspended operations at its facilities in Ayutthaya due to the flooding and a loss of power. Hutchins said it plans to increase production output at its US assembly operations and will use existing inventory to meet customer demand, IHS said.
By: DocMemory
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