Erica Yen, Taipei; Joseph Tsai

 

HDD players Western Digital, Seagate, Hitachi Global Storage Technologies (HGST) and Toshiba have all been impacted by the floods in Thailand amid power shortages and a breakdown in transportation in the country. HDD supply is unlikely to recover within the next six weeks, according to sources from hard drive players.

Most downstream players are aggressively working on piling up their HDD inventory to avoid potential shortages in the fourth quarter of 2011.

In addition to hard drive makers, most of the HDD upstream component makers such as Japan-based Nidec (spindle motor), Taiwan-based Min Aik Technology (CAS) and Cal-Comp (PCB) also manufacture their products in Thailand.

With Thailand's Rojana industrial park, where several related players are located, has already submerged by the flood, the plants have all been shut down, while plants that are not flooded are suffering from power shortages and a transportation breakdown. The sources believe a fully recovery of operations will take, at least, more than six weeks.

Thailand and Malaysia are the two major production bases for Western Digital. The company manufactured 32 million hard drives in Thailand in the second quarter of 2011, accounting for 50% of its total HDD shipments in the quarter. Although the company's plants were not directly impact by the floods, the power shortages and transportation issues are expected to reduce its production volume in Thailand in the fourth quarter.

Western Digital pointed out that it has already halted its production in Thailand to protect its employees' safety, while Toshiba has also stopped operations at its plants in Thailand. Nidec's two subsidiaries in Thailand have both halted their operations too.

Min Aik's two subsidiaries in the Rojana industrial park were both flooded, and losses could reach as high as US$38.62 million. The company is currently waiting for the waters to subside before taking further action.