Two of Orange County’s largest companies are facing supply and production disruptions in the wake of floods that have surged over Thailand and hit other parts of Asia in recent weeks.
Irvine-based Western Digital Corp., the largest computer products maker here, temporarily suspended hard drive production last week at its plant outside the Thai capital of Bangkok.
Aliso Viejo-based Microsemi Corp., the third-largest chipmaker based here, suspended contract work at a manufacturing plant in the region.
Other locally based companies with factories or suppliers in Southeast Asia could face disruptions to operations in the current and coming quarters as the region deals with the brunt of some of the worst flooding in decades.
Heavier-than-usual monsoons, punctuated by typhoons, have deluged the region since July. Hundreds have perished in flooding and scores of factories have been shut down.
Western Digital executives said members of its work force of some 37,000 people in Thailand were safe.
The company said it expects production to be “constrained” in the current quarter due to damage to transportation links, utilities, factories and the homes of many of its employees in Thailand.
Western Digital’s disk drives go into computers, external storage devices, corporate networks and consumer electronics. In the June quarter, Western Digital shipped about 32 million disk drives—more than half of its total for the period—from Thailand. It counts on a base of local suppliers for various components.
The full extent of the effect the floods has yet to be determined, the company said.
Update This Week
Western Digital executives said they plan to provide updates during a conference call this week with analysts and investors.
Investors sent Western Digital shares down more than 4% at the end of New York trading Oct. 12—the day the shutdown was announced—to a market value of about $6.4 billion.
Microsemi was forced to suspend operations at its manufacturing plant in the Rojana Industrial Park in Ayutthaya, about 40 miles north of Bangkok, where heavy damage has been reported.
The industrial park had no power last week and officials ordered an evacuation of the area.
Microsemi’s equipment has sustained damage and revenue could be affected in the December quarter, according to Rob Adams, vice president of corporate development.
Water Still Rising
“We don’t really know at this point,” he said last week. “Water is expected to rise the next three days.”
The Ayutthaya plant employs a handful of workers who do testing and assembly.
The company is working on a recovery plan to fill orders and provide customer service. They’re evaluating options, including a shift of production to other facilities, according to Microsemi Chief Executive James Peterson.
Powerwave
Santa Ana-based Powerwave Technologies Inc., which makes antennas, filters and other cell phone tower gear, runs a 135,000-square-foot factory in Thailand that employs 565 people.
The company did not respond for comment for this story.
Powerwave’s devices capture and boost radio signals between cell phones and base stations inside towers.
Santa Ana-based Ingram Micro Corp.—the biggest distributor of computers, software and other technology products in the world, and largest public company based in Orange County—has a small operation in Thailand.
It doesn’t expect its operations to be af-fected, according a spokesperson.
The operation, which includes an office and warehouse in Bangkok, is part of the company’s Asia-Pacific region, which includes China and other countries in Southeast Asia, along with India, Australia and New Zealand. The region generated 22% of Ingram’s nearly $35 billion in sales in 2010.
Irvine-based Broadcom Corp., the largest chipmaker based here, doesn’t expect any fallout from the flooding, spokeswoman Karen Kahn said. The company doesn’t have operations in Thailand and doesn’t expect any supply constraints, she said (see related Special Report on Fastest-Growing Public Companies in this issue).
