New Floods Have No Impact on Hard Drive Industry – Report

As Storms Loom in Thailand, Seagate and Western Digital Remain Unaffected

by Anton Shilov
10/01/2013 | 11:35 PM

New floods in Thailand have already affected 32 out of 77 provinces in the country and killed tens of people, according to the local authorities. But despite of tragic consequences hard disk drive industry, which suffered massively from the flooding in 2011, will unlikely be affected by this year’s disaster. According to analysts, HDD makers have diversified their manufacturing base to countries outside Thailand and made other preparations.

 

Thailand’s disaster prevention and mitigation department said that more than 2.8 million people were affected by the flood and 15254 had been evacuated from their homes. Since mid-September, 23 people were killed by the floodwaters, reports Associated Press news-agency. The natural disaster was considerably more dramatic two years ago. More than 800 people were killed and 6 million hectares (14.8 million acres) of agricultural, industrial and residential lands were devastated. 

The situation is different from that in 2011. In addition to that, hard drive makers have made a lot of efforts to reduce potential effect on their production facilities in the country by annual floods in September – October timeframe.

“Based on discussions with our best contacts, we believe that there has been no impact to the tech industry (HDDs in particular) thus far, though the situation is being watched. The recent Typhoon, despite having brought rain and some flooding, does not appear to have caused more than minor road flooding near company industrial parks. Recall that the drive industry (and the country in general) has expended huge sums of money to increase the height of flood walls in order to prevent a repeat of 2011. Companies such as Western Digital and Nidec also diversified their manufacturing base to countries outside Thailand as further protection. With inventories so low and pricing already firm, we are watchful for any disruptions that could drive pricing higher and limit availability. For the moment, though, there seems to be no impact. We will be back to you with more details if the situation changes. In the meantime we reiterate our positive view on the space,” said Richard Kugele, a storage analyst with Needham & Co., reports Tech Trader Daily.

As a consequence of 2011 flooding, significant part of Western Digital’s manufacturing facilities were damaged. A number of HDD components makers have also suffered, which decreased production of hard drives significantly at both Seagate and WD for months.