Western Digital's Thailand Plants Flooded

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Irvine, Calif. - Western Digital's Thailand-based hard drive factories have been overtaken by flood waters, creating a potentially large shortfall in hard-disk-drive (HDD) production.

On Oct. 12 Western Digital had voluntarily shut down its Thai factories even though these were not directly impacted by the flooding. The company made the decision to protect its workers and because local component manufacturers had been closed, disrupting the supply chain.

The company now expects its hard-drive operations and ability to deliver finished product will be severely impacted as its two main plants are directly affected by the flooding. Last week the potential problem was described as creating a merely constrained supply situation.

The facilities are located in the Bang Pa and Navanakam industrial parks located outside of Bangkok. Each was hit when the levees defending the sites were breached over the weekend by flood waters created by an extremely severe monsoon season.

The company reported the flood defenses at Bang Pa were overwhelmed during the weekend, inundating WD's facilities and submerging equipment. The water began entering the Navanakam industrial park Monday morning local time, threatening WD's plant there, but further details were not yet available.

Adding to the HDD manufacturing problem is the flooding has also shut down many of the component manufacturing plants in the country that supply WD.

The two factories made about 32 million hard drives during the quarter, ended July 1 -- about 60 percent of WD's total output.

Hitachi GST also issued a warning stating the flooding is impacting its Thai plants in Prachinburi and Chonburi. While Hitachi's facilities have not been damaged by the flooding, the company said regional component suppliers have been shut down, creating a situation of near-term production constraints primarily to its Travelstar mobile hard drives.

Hitachi is conducting an inventory of its sub-components and looking for other sources in order to minimize the impact to its production line.

Hitachi added that despite these moves, it expects an immediate slowdown at its Prachinburi site.

Last week Seagate had also shut down its Thai-based factories as a precaution. That company has not made any new announcements, but it is expected to update the situation on Oct. 20 during its quarterly conference call.


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