Storage analyst IHS iSuppli reported that Thailand's worst floods in more than 50 years could lead to a shortage of HDD supplies during the current quarter and that this situation may continue into Q1 of 2012.
Thailand, home to a large
number of manufacturing facilities-which produce one-quarter of the world's
hard disk drives-is being hit hard by heavy flooding that may directly affect
the movement of hard drives into the various markets.
Storage analyst IHS iSuppli
said in a flash market report Oct. 17 that Thailand's worst floods in more than
50 years could lead to a shortage of HDD supplies during the current quarter
and that this situation may continue into the first quarter of 2012.
"While it is too early
to gauge the extent of the impact of the floods, HDD supplies are likely to be
constrained throughout the fourth quarter [of 2011]," according to IHS
storage analyst Fang Zhang.
IHS's current HDD forecast,
published before the disaster, calls for the production of 176.2 million hard
drives during the fourth quarter, representing 25.9 percent of annual
manufacturing in 2011. IHS likely will downgrade its fourth-quarter production
forecast in light of the impact of the disaster, Zhang said.
Motors for Many Drives Affected
floods, which have swept the country for the last two months following
torrential rains, may have affected operations for the supplier of a key HDD
component: the motor. Nidec Corp. supplies more than 70 percent of all global
HDD motors, and all the major HDD manufacturers-including Western Digital,
Seagate, Hitachi GST, Toshiba and Samsung-source motors from Nidec. Nidec has
two subsidiaries in the country: Nidec Electronics and Nidec Precision, both
located in Ayutthaya in northwest Thailand.
Western Digital, the world's
No. 1 HDD supplier in terms of sales volume, and Toshiba have temporarily
halted production of HDDs in Thailand, affecting a major portion of global
hard-drive manufacturing. The companies operate HDD assembly facilities in Pathum
Thani province near Bangkok.
WD has 37,000 workers in
Thailand, and production in the country accounts for 60 percent of the
company's total capacity. WD in the second quarter made 53.8 million HDDs,
giving it a 32 percent share of the global market.
No. 2 HDD supplier Seagate,
which has about 30 percent of the market, has a head stack and head gimbal
assembly facility in Teparuk, Thailand. The company also conducts slider, head
assembly and HGA operations in Korat, Thailand. However, both facilities have
remained operational following the disaster.
Toshiba employs about 3,900
workers in Thailand, where about 50 percent of the company's manufacturing capacity
is located. Toshiba was the No. 4-ranked HDD supplier in the second
quarter of 2011, with 17.8 million units and a 10.6 percent share.