Western Digital restarts hard disk production

Western Digital has restarted hard disk production at a flood-damaged site in Thailand, resuming operations ahead of schedule.

Western Digital Scorpio mobile HDD.
Western Digital Scorpio mobile HDD. Western Digital

Hard disk giant Western Digital said today that it has partially restored production at a facility that had been shut down because of the flooding in Thailand.

The world's largest HDD manufacturer in terms of volume, Western Digital was one of the hardest hit by the flooding. The company has 37,000 workers in Thailand, and production in the country accounts for 60 percent of the company's total capacity, according to IHS-iSuppli.

WD restarted production of hard drives this week in one of its buildings in Bang Pa-in, Thailand, one week ahead of internal schedules, the company said.

"This facility had been submerged in some six feet of water since October 15, the estate was pumped dry on November 17, main power was restored on November 26 and production restarted November 30," according to a statement.

WD went on to say that it expects to begin head slider production (the slider allows the HDD's head to maintain a consistent flying height above the disk) in Bang Pa-in during the March 2012 quarter and also begin production at a new slider fabrication facility in Penang, Malaysia, in the same timeframe.

Other facilities in Thailand, however--at Navanakorn--remain under two feet of water. Those facilities are expected to be pumped dry within 10 days, then decontamination and refurbishment will begin, WD said.

For the industry as a whole, WD expects that hard drive shipments in the December quarter will be limited to approximately 120 million units, including units that were in inventory at the beginning of the quarter. Demand for the December quarter is in the range of 170 million to 180 million units. WD "believes that significant industry supply constraints will continue in the March quarter and beyond."

For the December quarter, the company expects revenue of at least $1.8 billion and gross margins above the high end of its business model range of 18 percent to 23 percent. Unusual charges related to the floods are expected to be in the range of $225 million to $275 million for the December quarter, exclusive of any insurance recovery, the company said.

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