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Thai Flooding Shutters HDD Plants

10/13/2011 01:55:48 PM Eastern

Irvine, Calif. - Seagate has joined Western Digital in
shutting down its hard disk factories in flood-ravaged Thailand.

ThailandThis will greatly constrain hard-drive availability for the
current quarter, the companies reported.

Seagate said today that while its facilities are not
directly impacted by the flooding and its employees can get to work, the supply
chain has been disrupted within that country, halting production.

Seagate said the plants affected are in Teparuk and Korat.
The former makes head stack and head gimbal assemblies, while Korat produces
sliders, head assemblies, head gimbal assemblies and final hard-drive
production.

Western Digital announced on Oct. 12 it had shut down
production at its Thailand factories due to flooding problems in the region
dramatically reducing its hard-disk-drive production capability.

The affected Westen Digital factories, located near Bangkok,
produced about 32 million hard drives in the quarter ending July 1, Western
Digital said. In addition, many of the hard-drive components are sourced from
local suppliers which are also impacted by the flooding conditions. The company
also has factories located in nearby Malaysia.

Like Seagate, Western Digital said the plants are still
operational, but all work has been suspended to protect its 37,000 area
employees and equipment from the rising water. Western Digital is still
assessing the situation as the situation remains highly volatile and the final
impact on production cannot be determined at this time.

Western Digital will make further announcements during its
Oct. 19 investment conference call. Seagate said it would do the same during
its Oct. 20 call.

The flooding, due to seasonal storms, is the worst in 50
years to hit the country and has killed about 280 people in the country,
according to a story in BusinessWeek.

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