Thailand Floods Cause Storage Shortages
October 24, 2011 7:30 AM
The battle against flooding in Thailand continues
Thailand continues to suffer from major flooding, which is having a major impact on the PC industry
PC sales are under continued pressure from a hard drive shortage caused by major flooding in Thailand, with one-fourth of the world's HDDs originating from the flood-ravaged nation.
The floods have shutdown more than 14,000 factories and forced at least 660,000 people out of work -- and has also severely damaged an already fragile global PC industry. Thailand remains the No. 2 maker of HDDs commonly used in PCs, notebooks and servers -- with hard drive manufacturers already suffering from lower demand for PCs and peripherals.
Both Western Digital and Seagate have warned of shortages because of supply issues, while Apple and other computer makers also confirm storage problems.
Earlier in the month, WD confirmed it was going to extend the suspension of Thai facility operations, due to manufacturing facilities being flooded. Even with manufacturing facilities still functional in the United States, Singapore and Malaysia, flooding "will have significant impact on the company's overall operations and its ability to meet customer demand" for the rest of 2011.
Even worse for WD, CEO John Coyne predicts a 60% quarter revenue decline from the same period last year, as the company looks to rebound as fast as possible.
Seagate's Thai production has not been hit as hard, but the US hard drive maker is expected to have a difficult time finding parts for its products.
Some companies are trying to shift manufacturing from Thailand to other facilities, and all of them must rebuild and assist their employees. Seyyon Semiconductor expects it to take at least one year for the Thai tech industry to fully recover, with the industry to remain volatile.
The Thai government has confirmed their efforts at draining floodwater has been more successful, while Bangkok Governor Sukhumbhand Paribatra warned residents to be prepared for increased flooding.
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
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