Brutal flooding has hit Thailand recently. The flooding, which killed hundreds, severed railroad links across the country, shut highways and damaged many buildings, naturally caused disruptions for the local industry. Two of the world's largest producers of hard drives - Seagate Technologies and Western Digital Corp. - on Wednesday provided updates on the impact of the flooding.
Currently, all Seagate factories in Thailand are operational and there are no logistical issues with employees reaching its factories. However, the hard disk drive component supply chain is being disrupted and it is expected that certain components in the supply chain will be constrained. Given the volatility of the situation it is unclear what the magnitude of the supply chain disruption will be to Seagate’s hard disk drive output from its Thailand operations.
"Seagate is actively managing its supply chain and factory output to align production capabilities and optimize its build schedule to meet customer requirements. As a result of the disruption caused by the floods, Seagate anticipates hard drive supply will be constrained throughout the current quarter," a statement by Seagate reads.
Western Digital has announced that production of hard drives in its facilities close to Bangkok, Thailand, will be constrained in the current quarter due to the severe flooding in Thailand. The flooding is causing problems with the region's infrastructure, including transportation and utilities, and has resulted in the inundation of some supplier facilities and employee homes. The company is gratified to report that its approximately 37 000 Thailand-based employees are deemed safe at this time. The company is working with its suppliers to maximize throughput and availability of parts in order to best meet the needs of its customers. While WD's facilities in Thailand are operational, production has been suspended on a temporary basis to protect its employees and its facilities and equipment against water ingress.
In the quarter ending July 1, 2011, WD shipped approximately 54 million hard drives from its facilities in Thailand and Malaysia, with approximately 60% coming from its Thailand sites. The company's Thailand operations source much of its supply of components from local suppliers.
The situation is dynamic, and circumstances can change quickly and frequently. The actual impact of the flooding on the hard drive industry will be clear at a later date.