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Thailand needs $64M to restore HDD industry

Posted: 23 Nov 2011 ?? ?Print Version ?Bookmark and Share

Keywords:Thailand flood? HDD? global HDD supply?

Thailand's Hard Disk Drive Institute (HDDI) is asking the government for $64.12 million (2 billion baht) worth of funds to help accelerate the rehabilitation of the country's HDD industry, according to a report by the Bangkok Post. The fund the institute is asking is ten times more than what it usually receives.

The three major HDD makers, namely Western Digital Corp. (WD), Toshiba Inc. and Seagate Technology LLC, have operations in Thailand. In the first half of 2011, the country accounted for 40 to 45 percent of the global HDD production. The flooding crisis has directly affected Toshiba's operations in Nava Nakorn Industrial Estate in Pathum Thani and WD's operations in Nava Nakorn and Bangpa-in industrial estates in Ayutthaya.

WD has called on the Thai government to bolster infrastructure to ensure the industry is well protected as its two factories have been inundated since last month. WD has 38,000 employees in Thailand and makes 60 percent of its HDDs in the country.

John Coyne, WD's president and chief executive, yesterday met with Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong. Coyne agreed with the government's short-, medium- and long-term infrastructure plans to protect against future flooding and said his company still believes in its Thai investment.

WD said it will supply 110 to 130 million HDDs to the world market in the fourth quarter, down from the 176 million units it delivered in the third quarter. The reduced output will not immediately affect sales due to an existing stockpile, Coyne said.

Thailand's electronics industry is expected to suffer a severe contraction in the fourth quarter in terms of exports of computers, parts and accessories, which account for 55 percent of electronics shipments.

International Data Corp. (IDC) has already predicted a global HDD supply shortage well into the first quarter of 2012. IHS Inc., on the other hand, has forecasted the Thailand flood will reduce global HDD shipments by as much as 30 percent in the fourth quarter of this year.

With HDD inventories expected to be depleted by 1Q12, PC productions are also seen to be limited, while full production levels will not be restored until manufacturers can recover from the crisis.

"After their machinery became inundated, some global HDD makers have begun thinking of moving some of their production to Malaysia and Singapore to reduce risk," said HDDI institute director Djitt Laowattana.

The HDDI receives $6.41 million (200 million baht) from the National Science and Technology Development Agency (NSTDA) for industry support.

"The requested $64.12 million will be enough protect the HDD export industry," said Laowattana, who is currently in talks with the Hi-Tech and Bangpa-in industrial estates and the Board of Investment asking for their cooperation.

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