Thailand Flooding

The producer of 40% of the world’s hard drives, Thailand, experienced devastating flooding during this October. The flooding, some of the worst the country has seen in decades, has closed approximately 1000 factories across Thailand, including those that produce NetApp and EMC disk drives.

The damage of the flooding on storage businesses demonstrates how fragile the global hard disk drive (HDD) market can be. Enterprises like Western Digital, Toyota, and Seagate have all been impacted as the floods have damaged supply chains and equipment as well as impeded logistics. Some analysts predict that there will be 50 million fewer hard drives produced, affecting present-day sales as well as Q1 estimates for 2012.

Western Digital Corp. and Seagate Technology LLC, major manufacturers of hard disk drives, rely on Thailand production centers and are expected to experience significant shortages. To compound the problem, Western Digital and Seagate Technology provide hardware for NetApp drives as well as EMC fibre channel drives. As the world’s data grows exponentially and disk drives are in high demand, some IT professionals are left wondering if they will be able to acquire the storage they need.

Impact on Technology Sector

Executives at NetApp, for example, have expressed their concern at the shortage of HDD and how this may affect their sales over the next few months. NetApp lowered their forecast for next quarter reflecting how concerns over HHD may impact results.

Although enterprise class disk drives many not be as greatly affected, it is expected that all storage companies will see effects from the fibre channel hard drive shortage. Rising HDD prices and delayed shipments may be possible for those who choose to purchase new drives while supply is decreased.

It appears that larger 1 TB fibre channel drives, 2TB disk drives and 3TB disk drives may not be affected by the shortage, but 300GB drives may be more heavily impacted by Thailand’s flooding.

Action from Thailand

Thailand’s worst flooding has proved devastating, taking the lives of over 500 people and destroying manufacturing plants. An estimated 4 million acres of farmland have been damaged, along with homes, cars, and highways.

Concerns over disease-ridden floodwater have prompted the distribution of mosquito nets by UNICEF, water purification systems, and bottled water handed out by members of the Red Cross. The government has dredged local canals, and has proposed construction of a ‘supercanal’ to reduce damages of future flooding. The government hopes that dredging the canals and adding new canals will speed the movement of floodwater toward the sea. However, officials have stated that it make take a month or more for the floodwater to completely recede.

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