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capital equipment costs to repair flooded hdd factories in thailand will be considerable

by:QY Precision      2019-09-23
Thailand\'s October/November monsoon floods have a considerable impact on many high-tech industries.
Perhaps no one has been hit as hard as the Western industry, major factories in Western Digital and Toshiba have been flooded, and many major HDD component suppliers have also been flooded. Even non-
Flooded production facilities like Seagate and Hitachi GST have been plagued by a shortage of parts from flooded suppliers.
In general, about 50% of the total hard drive assembly capacity is in Thailand, and WD\'s production in Thailand accounts for about 60% of the total hard drive output.
Due to this flood and long-term damage to equipment and facilities in Thailand, hdd shortages will occur in December 2011 and 2012.
In addition, replacing and repairing capital equipment at flooded factories will result in a significant increase in capital equipment spending by 2012, which could be close to $1.
Although the demand for HDDs in the calendar quarter of December 2011 is estimated to be as high as 180 units, the actual production is estimated to be 110-120 M HDDs.
50 difference
60 m units between production and demand resulted in 20-
50% in the short term.
Production in the third quarter of 2012 was limited to 120-
130 units in demand (
Including depressed demand in the previous quarter)
Higher is the long-term price of HDDs in the range of 25% compared to the previous
The flood may reach in the near future.
The average selling price (ASPs)in the $62-
For CQ4 2011 and CQ1 2012, the price range of $65 is very likely.
In addition to rising prices, HDDs\'s market share leadership may shift from western numbers to Seagate in the short term until WD is able to move production to other Asian countries, or put new Thai facilities into operation.
The impact of flooding on the WD interim leadership may pave the way for a merger between WD and Hitachi GST (
Hard disk operation of Hitachi)
European regulators have postponed the plan.
Toshiba has announced it will restart some of its Thai production in early 2012, but WD has not yet issued a public statement on when it can start operations in Thailand or nearby countries to replace lost Thai production.
Some companies are able to save their equipment from the flood, so it will resume operations faster than others. Magnecomp (part of TDK)
A manufacturer of hard drive head suspension announced that production will begin in a factory in Thailand on November 7, 2011.
Although the company had to stop operating in October 8
12. Before the Flood, 2011 employees were able to remove 95% of the production equipment from the first floor of one of its facilities.
Thanks to this heroic effort, the MPT will resume operations ahead of many other facilities to help the TDK strive to supply heads to the hard disk industry, and replace some of the shortcomings of the lost slider manufacturing and head assembly facilities of companies such as western numbers.
2012 hard drive technology and capital report by Coughlin Associates (
By the end of November 2011, www. tomcoughlin. com/techpapers. htm)
I will look at the cost of capital associated with the repair and replacement of damaged equipment in the floods in Thailand and estimate how long it will take for these plants to go into operation.
Equipment that is soaked in water for a long time requires at least large-scale repairs, and it is likely that most of the equipment will need to be replaced.
The required equipment ranges from hundreds of CNC machines, to special fixtures and equipment for the production of sliders, to back-end drive test equipment and other specialized production, measurement and production measurement equipment.
If, as we expected, most of these devices had to be replaced, the total cost of capital equipment caused by floods in Thailand could be close to $1.
Combined with an attempt to increase production to meet the growing demand for HDDs 2012, this could be a very good year for some hard disk and hard disk component capital equipment providers.
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