By GABEY GOH email@example.com
KUALA LUMPUR: Hard disk drive manufacturer Western Digital (WD) is shifting production over to Malaysia to counter the shortfall in stock due to the flooding in Thailand.
“We are ramping up the Malaysian facilities to full capacity and pursuing options at other locations,” said Western Digital director of sales for Asia South, Margaret Koh.
As the facilities in Thailand will not open until the flood waters recede, the company is currently exploring ways of expediting the recovery process via working with suppliers to remove or transfer the production equipment to other sites.
It has two manufacturing sites located in Malaysia, one in the Bayan Lepas Free Industrial Zone, Penang and another in the Sungei Way Free Industrial Zone, Selangor.
The company’s Thailand sites account for about 60% of its global hard disk drive supply, and WD is expecting a significant impact to overall operations and the ability to meet customer demand for its products in December.
“Our regular capacity will be significantly constrained. Our current focus is on the well-being of our employees and satisfying the needs of our customers,” Koh added. WD has warned that price increases are inevitable with the disk drive shortage expected to linger well into 2012.
WD chief executive officer John Coyne was quoted in various online reports stating that the company’s December quarter revenue will fall 60% from a year ago and recovery is expected to be a “multi-quarter task.”
The company has also revealed that its customers have about two weeks of inventory on hand and distributors have around four weeks worth of supplies.
According to investment bank Rodman & Renshaw, the supply of hard drives is estimated to be about 10% less than demand for the December quarter.
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