Analyst echoes HDD industry’s Thailand flood concerns

Posted 19 October 2011 13:00 CEST by Justin_Massoud

Market researchers at IHS iSuppli have agreed with recent comments from Seagate and Western Digital that flooding in Thailand will impact their HDD shipment figures this quarter. Fang Zhang, a storage analyst at IHS, went so far as to one-up that prediction, claiming across-the-board production constraints will be seen through 2011. As a result, the firm plans to lower its own global HDD shipment forecast for the fourth quarter, said Zhang.

According to IHS, the flood’s impact on one particular company could affect every major HDD manufacturer’s operations in the country. Nidec, which provides all-important motors to Seagate, Western Digital, Toshiba and more – likely saw its two facilities in Ayutthaya, Thailand hit.

The supply chain disruption doesn’t stop there, however.

“Hard disk drive suspension assembly maker Hutchinson Technology also temporarily suspended operations at its facilities in Ayutthaya due to the flooding and a loss of power,” wrote Zhang. “Hutchins said it plans to increase production output at its U.S. assembly operations and will use existing inventory to meet customer demand.”

A push to domestic operations makes sense, but Thailand’s contribution to the market is vast. IHS estimates that 25 percent of all HDD manufacturing plants are found within its borders. Toshiba alone sees half of its storage products – nearly 9 million units – come from Thailand says the research group.

Seagate and Western Digital admitted last week that they anticipate reduced production output in the near future. On Monday, the latter amended its earlier statement with more concrete details, foreseeing a “significant impact” to its overall operations through December due to the natural disaster.

Both companies will release new statements in the coming days.

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