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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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