Earlier today Samsung and Acer noted the impact the Thai floods will have on their business. Here are some pictures from inside Western Digital’s Thai Factory:
I sent this to a few of my friends in the industry. One industry exec had this to say:
It turns out that Bang Pa in facility was submerged with 2 meters of water. This is the old Read- Write facility and I have been in it many times. The first floor is where most of the slider processing equipment was located. Most of the equipment was lost to the flood. They last saws, grinders, sorters, cleaners, steppers, alignment tool etc. It’s a real mess. This situation for WD is pretty bad because they had all their slider fabrication in one basket. It will take at least 4 months to start the recovery and a year to get back to where they were pre-flood. It looks like the high water will not recede for at least 3 weeks.
The issue that is affecting all the drive companies has to do with the supply chain. Hutchinson, Magnecomp, Nidec, On Semiconductor, MicroSemi. All facilities are in similar industrial parks that have been flooded or closed by the flood.
Two Fabrinet facilities are down hard. These two facilities make a large percentatage of optical devices for JDS Uniphase, OCLARO, Finisar and Emcore. On Semi’s fab for power and signal management, logic, discrete and custom devices has also taken a hit.
In a follow-up conversation we talked about the equipment and how it would take a long time to replace – perhaps as long as 6 months. One of the reasons for this is that low capital investment rates in disk drive manufacturing pushed many of the companies supplying tools to the manufacturers to down-size or, worse yet, leave the industry. It’s not going to be easy for WD to ramp back up.
This story is bound to get more coverage in the coming weeks because it is going to have a significant impact on a host of companies