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Thai Flood Waters Recede, Problems Remain

11/21/2011 12:01:00 AM Eastern

NEW YORK – The flood waters that have devastated
Thailand and its industrial base are finally receding,
but companies in the hard hit region are still tallying
their losses.

Outside of the human tragedy caused by the strong
monsoon-induced flooding, which has caused more
than 500 deaths, hard-disk-drive and digital camera
manufacturers have seen production slow to a crawl
or stop completely.

Western Digital, one of the hardest-hit companies,
with two factories fully flooded, last issued a statement
on Oct. 26. The company then said its component suppliers
were still offline, but it was working with these firms
to find short- and long-term solutions to the problem.

Western Digital added that the flooding created
huge obstacles that will take the nation and corporations
multiple quarters to overcome.

Fang Zhang, IHS iSuppli storage analyst, noted
Western Digital’s Bang Pa-In plant is still flooded, although
the water level has dropped and could be fully
gone by the end of November.

Hitachi GST said in a statement issued on Nov. 11
that supply constraints will force the company to idle
its Thailand-based plants for all of November. This will
primarily impact the company’s notebook and desktop
hard drive product lines. The company will retain its
workforce in the Thailand facilities, which remain dry
and unaffected by the flooding.

Hitachi hopes to restart production in December,
with full recovery by the second quarter of 2012.

Seagate has also been hard hit by the component
supplier disruption and has forecast that it will ship 16
percent fewer drives during the last quarter of 2011.

Digital camera makers in the area also continue to
experience problems.

Nikon reported its factories in the Rojana Industrial
Park are still underwater but are being pumped out.

Canon and Sony have also been affected, but have
not issued any recent reports on the situation.

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