Western Digital Expects Full Capacity in Thailand by SeptemberTuesday, January 17, 2012
Irvine-based disk drive maker Western Digital Corp. expects to have its Thailand operations running at full capacity by September, Chief Executive John Coyne said Tuesday.
The announcement came at an industry seminar, according to Reuters, and marks a significant step in the company’s efforts to repair equipment and restore its two plants in the Bangkok area that were severely damaged in one of the worst floods to hit the region in decades.
Investors seemed to shrug off the news as Western Digital shares were flat in midday New York trading on a market value of about $7.8 billion.
The company reopened one of its two plants in Thailand in early December.
Both had been closed for months as the country was hit with a heavier-than-usual monsoon season punctuated by typhoons.
Thailand is the world’s second-largest producer of disk drives, behind China, and also a major supplier of hard drive components.
Western Digital ships about 60% of its disk drives from Thailand, where it employs some 37,000 people.
The company’s buildings there house assembly and testing operations along with a substantial majority of the company’s slider fabrication, which accounts for a key component in disk drives.
Western Digital has been the global leader by number of drives shipped in recent years but second in revenue to Cupertino-based rival Seagate Technologies Inc., which leads on sales of more-expensive corporate drives.
It was projected to slip to No. 3 or No. 4 worldwide, according to El Segundo-based market tracker iSuppli Corp., a unit of IHS Inc.
The quicker-than-expected recovery could change that outlook when the companies report earnings for the December quarter.
Western Digital is set to acquire San Jose-based Hitachi Global Storage Technologies Ltd. in a $4.3 billion deal that was set to make it the undisputed leader in drives—although recent troubles in Thailand have cast some doubt on that likelihood.
The move prompted Seagate in April to offer $1.4 billion for Samsung Electronics Co.’s disk drive business.