Understanding the Hard Drive Shortage
It seems clear that the damage to WD’s facilities took place in two locations- Bang Pa-In (BPI) and Navanokorn (NVK). It appears that NVK is still dormant at this point and they are still pumping out the water.
On the other hand, BPI resumed manufacturing activities over a week ago. What is unclear is exactly which aspects of the manufacturing process have resumed and what does that mean for actual output of a finished disk drive? From what I can gather, it seems that WD was able to resume head slider production at BPI. That’s great, but what does that really mean in the big picture?
In order to understand better, I tried to find more information about the complete hard disk manufacturing process. The best information I could find was this tutorial posted on tomshardware.com back in early 2010. It’s mostly focused on NPI activities and R&D process, but does indicate how those activities are transferred over the mass production.
http://www.tomshardware.com/picturestory/525-western-digital-tour.html
This Wiki listing is also very helpful-
http://en.wikipedia.org/wiki/Hard-disk_drive
It appears that the main components for assembly in a hard drive are as follows:
- Top Cover Mounting
- Base Casting
- Spindle
- Slider (or Head)
- Actuator Arm
- Actuator Axis
- Actuator
- Platters
- IC Logic Board
Clearly, part of what was damaged in the floods were factories that manufactured the critical components making up the hard drives like spindles, actuator arms, heads (sliders) etc. The heads seems to be presenting the biggest challenge of all components.
What remains elusive is how the final assembly process can be restarted once the component supply is back in place. There is a great YouTube video published by FastCompany back in 2008 which shows a Seagate plant in Wuxi, China with the final assembly and testing for 2.5″ drives.
If WD had similar equipment and facilities in Bang Pa-In (BPI) and Navanokorn (NVK), is it realistic to assume they can resurrect them within any reasonable time period? This final assembly process seems to be quite sophisticated in terms of equipment and facilities based on the Seagate video.
Some have suggested that one way WD could accomodate more capacity would be to ramp up “good” facilities (like in Malaysia) to 24/7 operations. My understanding is that most, if not all, HDD factories already operate 24/7. I just wonder where WD can add capacity quickly even if they can line up alternate supply on the components.
One aspect of this situation that is also troubling is the lack of information available on the impact of the floods on Toshiba’s operations. They have disabled operations at their facilities in Pathumtani and Navanakorn and based on their most recent official update they’re not close to resurrecting anything.
http://www.semicon.toshiba.co.jp/eng/event/news/1200765_7141.html
Our position right now is based on an expectation that the market for HDD will soften slightly as companies (especially In Asia) look to reduce their inventories for year end and for an expected slowdown going into Chinese New Year. The fact that it starts on January 23rd this year provides an additional incentive for distributors and OEM’s to simply “write off” the period between calendar year end and the end of Chinese New Year.
We expect that the HDD manufacturing lost from the floods will not be able to recover in any significant way before April. Any excess product in the channel due to current “dumping” actvities will be quickly consumed right after Chinese New Year if not in January itself. This article supports that theory with quotes from Seagate, WD, and Toshiba.
http://news.originstorage.com/index.php/tag/thailand-flood/