Hitachi bares manufacturing consolidation plans

As part of apreviously announced manufacturing consolidation plan, Hitachi Global Storage Technologies will tap two of its three facilities in Shenzhen to be 'centers of competency' for the production of its HDD media and head-gimbal assemblies (HGA) components.

"As the primary manufacturer of media and HGAs for Hitachi, Shenzhen will develop a level of technology specialization that will result in highly valued skill-sets for the local workforce and our customers," said Dirk Thomas, president, Greater China, Hitachi Global Storage Technologies.

At present, the Shenzhen facilities produce media, HGA and final HDDs. In line with the consolidation plan, Shenzhen will now manufacture the media for enterprise hard drives and HGAs for 2.5-inch automotive HDDs.

Hitachi also hopes that this plan, which will place the whole manufacturing supply chain—from component manufacturing, to suppliers, to final assembly, to shipping—in close proximity, will enable the company to increase efficiencies and reduce cycle times and shipping costs.

Increasing competency
Hitachi's manufacturing facilities, primarily based in Asia, are being customized to create a higher level of specialization and reliability for the production of critical HDD components. Moreover, Hitachi's plans for centralized development are expected to accelerate the implementation of future HDD technologies, such as patterned media and thermally-assisted recording.

Hitachi's facility in Laguna, Philippines will be streamlined to increase production capacity for sliders and to also become its center of competency for the manufacture of slider components. Consequently, Hitachi will phase out its slider manufacturing facility in Guadalajara, Mexico by mid-2008.

With the Shenzhen facility becoming a center of competency for media production, Hitachi will phase out its media manufacturing operation in Odawara, Japan by the Q4 2007.

Meanwhile, its Prachinburi, Thailand facility will be streamlined for the manufacture of its 2.5-inch automotive HDDs. Hitachi will also increase its HGA production in the facility.

Hitachi's fab in San Jose, California on the other hand, will continue to manufacture HDD media, complementing the Shenzhen operation.

Hitachi also eyes to implement development consolidation for its facility in Odawara, which will become a center of competency for slider development, and its plant in California, which will become a center of competency for media development.

As a result of the manufacturing and development changes, Hitachi expects to gain potential savings of $300 million over the next five years. Moreover, Hitachi will reduce its 40,000-person global force by 11 percent with the closure of its Guadalajara plant. The consolidation of the facilities will be completed by end of 2008.