News item: Disk drive maker Seagate Technology, busy cutting costs along with everybody else in the struggling world economy, said Aug. 4 that it will have to shut the doors of its Singapore hard disk-drive manufacturing plant by the end of 2010. About 2,000 workers will lose their jobs, although some of them will be relocated.
Seagate will relocate the manufacturing operations to factories in Thailand, where it already has longtime associations. It will retain its Asia headquarters and its design and development operations in Singapore, however.
"Seagate has been doing less and less hard drive manufacturing in Singapore," analyst and events organizer Tom Coughlin of Coughlin Associates told eWEEK. "They already have a longtime [presence] in Thailand and China, where the labor costs are even less than [in] Singapore."
Coughlin said all the major disk drive makers either own or are using drive manufacturing plants in Thailand. Western Digital, for example, makes nearly all of its hard drives in Thailand, Coughlin said.
"This [closing] is a big deal [for Seagate], because they spent a lot of money on that factory -- their 'factory of the future' -- about 10 years ago," Coughlin said.
Seagate's so-called factory of the future is one in which almost all production is integrated into one line that can make any drive upon demand.
According to a recent Securities and Exchange Commission filing, Seagate expects to save about $40 million a year -- mostly in labor costs -- after the Singapore plant closes and the restructuring is complete.