Jump to content

Thai floods halt WD hard disk fabs

Recommended Posts



Water and high-tech factories don't mix well


By Chris Mellor


Posted in Storage, 12th October 2011 14:41 GMT


Western Digital has temporarily suspended disk drive-related production in its Thailand sites close to Bangkok due to severe flooding.


Flooding in Thailand is sparking transportation and utility infrastructure headaches with some supply facilities and peoples' homes inundated.


WD has some 37,000 employees in its Thai facilities and they are all safe. These employees helped WD ship around 54 million hard disk drives from its plants in Thailand and Malaysia in the quarter, which finished on 1 July, 2011, with about 32.5 million coming from Thailand.


The company expects supply of disk drives in this quarter to be constrained because of the flooding and is doing its best to work around the problems with its suppliers. The production facilities are operational but production has stopped to enable the facilities to be protected against rising water.


WD says the situation is pretty fast-moving and conditions in Thailand may well change. ®

Link to comment

yep water everywhere in Thailand

i am stuck at my parents in laws place as the roads to Bangkok are flooded

so i can not go home .... not a big issue for me ... peace and quiet here ;)

and i still have internet so no worries ....

A lot of factories are closed though ... Honda cars and motorbikes... yamaha motorbikes ....  and it continues raining and there is high tide next week ... so more problems to come....

Link to comment
  • 2 weeks later...

No... I don't think pumping the water out will work for very long.  There's plenty more waiting to flow in to take its place.


but... it is a three story building...

Perhaps they can just stop the production on the first floor. (and the basement) ;)




Joe L.

Link to comment



"Some flood-hit Thai tech firms aim to reopen by Dec



By Khettiya Jittapong and Ploy Ten Kate


BANGKOK | Tue Nov 1, 2011 7:17am EDT


(Reuters) - Some big Thai producers of electronic parts could have their flood-hit factories up and running again by the end of November, sooner than expected now that flooding in central provinces has stabilized, but the picture varies greatly across industry.


Avaplas (Thailand), a subsidiary of Cal-Comp Electronics (Thailand) Pcl, is scheduled to resume production of its molded plastic precision parts gradually from November 25.


Stars Microelectronics (Thailand) Pcl, which had to shut its hard drive part plant at Bang Pa-in estate in Ayutthaya province, said it would restart some production lines on December 1.


Stars Micro and Cal-Comp supply to clients such as hard drive maker Western Digital, which itself has two manufacturing facilities in Bang Pa-in estate and Nava Nakorn Industrial Park in Pathum Thani province, both of which have been severely hit by floods.


Thai printed circuit board (PCB) maker KCE Electronics Pcl said its affected plant might restart a little later in January.


KCE, which supplies PCBs to clients such as Bosch and Continental AG, and Cal-Comp's unit have factories at Hi-Tech Industrial Estate in Ayutthaya province.


"We will certainly resume operations in January. We have inspected the affected plant where floodwater is not as high as in other areas in the estate," KCE executive director Panja Senadisai told Reuters.


Flooding in central Ayutthaya province will affect KCE's fourth-quarter sales but the impact on the bottom line in that period should be limited, Panja said, adding that it would miss its 2011 revenue target by only a small amount after a strong first nine months.


Some analysts had forecast it would take about 6-12 months before the makers of electronics components could start producing normally again.


Shares in KCE have jumped more than 30 percent since Monday on talk that an improvement in the flood situation would allow it to resume operations. It rose nearly 3 percent on Tuesday while the main market index fell 1.9 percent.




Shares in Thailand's MCS Steel Pcl rose more than 4 percent after the company said some production line staff and support teams had resumed operations on November 1 to ensure some shipments.


The listed Rojana Industrial Park Pcl -- the estate worst hit by the floods -- could start draining out water next week.


"The situation is improving," Amara Charoengitwattanagun, director of the park, told Reuters. "The water at Rojana has now receded by about 30 cms measured from a peak around Rojana power plant area of 2.80 meters."


Nearly 200 factories, including one run by Japanese car maker Honda Motor Co Ltd, had to close at Rojana, about 70 km (45 miles) from the center of Bangkok.


Honda is the worst hit of the Japanese car firms in Thailand as it has lost its main assembly plant -- accounting for 5 percent of its global output -- as well as component factories.


Canon Inc, Nikon Corp, Hitachi Metals Ltd and Siam Cement also have operations on the Rojana estate, according to its website.


Amara said it would take roughly one month to drain away the floodwater. "Most operators on our estate are waiting for the water level to come down a bit more before getting to their sites to start assessing the real damage," she said.


Rojana planned to build a concrete dike up to 4 meters (13 feet) high around the estate to defend it in the future.


"We are working on details of the plan and could ask the government for help in terms of financial support and a soft loan," she said.


The government has already prepared 350 pumping machines to help drain water from the industrial estates.


"Once the water recedes to the same level of the dike of each estate, we would immediately get in and start the draining process," Amara said, expecting it would take up to 45 days after that before the situation returned to normal.


($1 = 30.81 Baht)


(Additional reporting by Wilawan Pongpitak; Editing by Alan Raybould)"

Link to comment

My emphasis in bold.




"Thai Authorities, Companies Blamed for Extent of Flood Damage



[THAIFLOOD] Wilawan Watcharasakwet /The Wall Street Journal



Canon and Hana Microelectronics factories were flooded in Ayutthaya, one of the worst-hit ares in Thailand.


AYUTTHAYA, Thailand—Workers at Japanese tech firm Nidec Corp.'s plant have a novel remedy for the flooding crisis that has shut thousands of factories here: They're piling up boxes of delicate motors for hard-disk drives on narrow wooden boats and ferrying them across a flooded plain to a truck waiting to take them to Bangkok.


The effort underscores the lengths to which some companies are going to preserve what they can amid Thailand's worst flooding in decades. But a key question emerges: Are the companies themselves partly to blame for some of the economic cost of the disaster?


Some experts say yes, and that the international impact of Thailand's floods should serve as a warning to other companies world-wide. Many have come to rely heavily on thin supply chains for their most critical components, especially in areas, such as Thailand or Japan, that are vulnerable to disasters.


Many companies "never step back and never see the big picture, and see where the potential problems in their supply chains might be; and this is especially true as these supply chains become more geographically dispersed," says Yogesh Malik, a partner at consulting firm McKinsey & Co.


"There are geological fault lines in places like Japan, and something someday might go wrong—these are knowable things," Mr. Malik said. "Supply-chain managers, though, they like to live on the edge fighting today's fires when they should be anticipating what could go wrong and learn to be more agile."


Thailand's flooding disaster has ricocheted around the world in ways few businesses expected. About a quarter of the world's hard-drive output is under water, driving up prices of computers and other high-tech equipment. Japanese auto maker Honda Motor Co.'s main Thai plant is semi-submerged, choking off the supply of key components to factories around the world.


The latest victim: Honda's factory in Brazil, where Japan's Nikkei daily reported that the company is preparing to cut production by almost a third to help conserve crucial components.


Floodwaters are gradually receding in a few of the worst-hit provinces, where at least 427 people were killed. But the recriminations continue about how the monsoon rains turned into such a devastating setback for the economy. In still-deluged parts of Bangkok, angry residents question why their homes were sacrificed to keep the remaining industrial sites dry.


It's widely agreed that Thai authorities share at least some of the blame for allowing extensive development in a floodplain without fully accounting for potential drainage problems in a country that floods regularly.


Some analysts here predict Japanese companies, Thailand's biggest foreign investors, will lean heavily on Thai authorities to do more to bolster flood defenses. Otherwise, they fear insurance concerns will be reluctant to offer coverage, forcing manufacturers to move out of the country, says Supavud Saicheua, an economist with Bangkok's Phatra Securities PCL.


Already, Prime Minister Yingluck Shinawatra is moving to reassure investors by pledging a large chunk of a proposed 800 billion baht, or $26 billion, recovery fund to developing better water-management systems. She tried to deflect some of the blame for the crisis, saying that by the time she took office after winning a July election, Thailand's dams and reservoirs already were full.


Yet supply-chain experts say much of the global impact of the disaster could have been averted if the companies themselves hadn't been so focused on saving money with lean supply chains.


In all, seven of Thailand's important industrial parks are flooded, knocking as much as two percentage points off its economic growth this year and wreaking havoc on the earnings outlook of many of the Japanese companies that have flocked here since the 1980s. Another industrial park was threatened with flooding Wednesday at Bang Chan in eastern Bangkok, after residents upstream tore down a flood barrier that had diverted deep floodwaters into their neighborhood for weeks, leaving Bangkok's local leaders to choose between the welfare of individual people or saving a key economic asset. They chose to rebuild the barrier.


"The conditions here are terrible," said Narongsak Srisawas, 45 years old, as he squatted on a rickety wooden raft outside his submerged home while soldiers helped rebuild a damaged flood-gate and later stood guard over the structure. "There are no toilet facilities, and there are leeches infesting the place. We had to make a protest."


With floodwaters continuing to rise in parts of Bangkok,some companies are taking steps to limit supply disruptions from natural disasters.


Speaking to reporters last week, Nidec's President, Shigenubu Nagamori, said that the company wanted to diversify its production base but that key customers in Thailand had wanted the company to manufacture locally. Nidec is now increasing its output at plants in the Philippines and China even as staff in Ayutthaya paddle out to salvage what they can from the plant.


Other companies said they were assessing their own procedures to prevent flood damage.


As the floodwaters were rolling toward Ayutthaya, Thailand's ancient capital north of Bangkok, semiconductor Hana Microelectronics PCL moved quickly to mitigate the threat. In early October, staff moved equipment up to the second floor of the company's plant, and moved out other components and inventory to other complexes in northern Thailand and Bangkok.


For the equipment too heavy to move, the company tried to build a water-tight room within the building, but the flood walls at the Hi-Tech Industrial Estate in Ayutthaya collapsed. "We will only know if our plan will work if and when the [estate] is actually flooded," Hana chief financial officer Terry Weir told the Thai stock exchange on Oct. 7.


Several weeks later, it still wasn't clear if the moves were sufficient.


"The water-right room was only partially successful, but we were able to slow the water coming and use pumps to pump it out," Hana chief executive Richard Han told The Wall Street Journal Wednesday. "We have been able to keep the level in that room much lower than the natural level and reduce the damage to equipment, but we still don't know if, finally, it was worth it or not until the equipment supplier can inspect the damage."

—Wilawan Watcharasakwet in Ayutthaya contributed to this article.


Write to James Hookway at [email protected] "

Link to comment

"Major disk drive motor supplier Nidec has resumed production at several facilities in Thailand, but continues to deal with damage to six sites that are still under water.


The component giant, which manufactures around three-quarters of the world's HDD motors, confirmed operations were back online at its Rangsit plant in Pathumthani Province and at a factory in the Ayutthaya region.


"We will continue our efforts to further improve the utilisation of the factories whose operations have resumed and to bring the company's other flood stricken factories back into operation to the earliest extent possible," said Nidec in an update.


Of the supplier's remaining operations in Thailand, two factories were not impacted by the flooding and a further six remain inundated, with operations obviously suspended.


"The exact amount of damage and the effect of the floods on the company's performance are being assessed currently. We will continue to report on any actual or potential impact on the company's business performance in a prompt manner," the supplier added.


According to reports in Digi Times, Nidec is leaning more heavily on its two production sites in the Philippines, raising monthly build rates from 15 million to 25 million units. And in China, capacity is to rise by 50 per cent to 15 million units.


The disruption to the disk drive supply chain caused by the flooding is expected to result in 48 million fewer drives being made this quarter, and has already led to drive price rises in the channel and warnings that PC shortages will occur in the run up to Xmas. ®"



Link to comment

I think one might have to take this story with a pinch of salt, but if it's true, WD could have trouble recovering:




"Since October 4, shares of STX have nearly doubled from less than 10 to nearly 20. That’s an impressive run, but a move above 30 appears to be in the making. Last week, Seagate CEO Steve Luczo presented at the Needham investor conference. There, he spoke graciously of his largest rival, Western Digital (WDC). However, he didn’t stop short of hinting that the competitive landscape has been changed for years to come.


The reason? Mr. Luczo suggests that some of WDC’s most critical equipment was damaged beyond repair. According to several sources, much of WDC’s sensitive machinery was located on the ground floor of a building that was inundated with over three feet of water. It has been widely reported that this water has since turned toxic due to an unsavory mix of chemicals, sewage, and organisms.


The waterlogged equipment is responsible for producing most of WDC’s worldwide supply of “sliders”. Suffice it to say that sliders are a necessary component in HDDs. Without them, an HDD can’t function. Before the flooding began, WDC’s Thailand operations produced 25% of the world’s sliders – roughly 75% of WDC’s personal supply.


WDC produces a small quantity of sliders in the Philippines. It also purchases some sliders from TDK, the Japanese electronics giant. However, these sources are only enough for WDC to produce about 15 million HDDs per quarter. That’s just one-fourth of normal production.


Even a 20% increase in HDD prices will leave WDC with less than $1B in quarterly revenue, far below Wall Street’s already-lowered estimates. As a capital-intensive company, the impact on WDC’s EPS will be even more dramatic, moving from large profits to large losses.


At present, many investors are only looking at this as a Q4 / Q1 event. However, based on the lead-times required to obtain new equipment, shore up its facilities, and ramp production, WDC may not be whole until the end of next year. Further, keep in mind that next year’s monsoon season could produce a repeat of this year’s disaster. Rain is obviously the root cause, but the horrific flooding was a direct result of all the roads and buildings that have been recently erected over land that once soaked up the rains. In other words, WDC can’t just dry out its facility and go back to business as usual. In fact, it may have to start from scratch."

Link to comment

I'm an angry guy. Maybe WD will consider to keep it's labor force in the US instead of a flood valley and monsoon area. Hey, the CEO only makes 5.3 million a year. I'm sure if the company can all agree to pay someone that much they have tons of money just floating around all over. No pun intended.



Link to comment

Just checked Newegg last night and I was blown away. I last purchased a 2TB it was in the $70 range now its $249


Man I knew I should of grabbed a few spares. LOL

Yes.  A friend at work puchased a WD Black for $79 dollars about 3 weeks ago.  We looked up the price on Friday and it was $219.
Link to comment


This topic is now archived and is closed to further replies.

  • Create New...