Thailand Floods: Hard drive makers fall victim to the natural calamity – Part 3

Bottom line: Western Digital held its own and the fallout could have been much worse.

Steve Luczo, CEO of Seagate, said his company has weathered the Thailand flooding better than most. Why? First, Seagate’s operations were relatively unscathed. Second, the supply chain is diversified.

Luczo said on Seagate’s earnings conference call:

“The disaster in Thailand affected a vast number of individuals and thousands of businesses. Although the industry is continuing to increase output, it’s important to note that while many observers tend to believe that mid to late October was the low point of industry production, we believe the low point was closer to mid-December. Seagate’s geographically diversified factory footprint and broad supply chain provided inherent advantages that mitigated the impact of the floods to Seagate’s operations. Although many of our external component suppliers are still working to recover their businesses and return to full capacity. We have been very impressed with the response and efforts of our suppliers who have worked tirelessly to rebound from the effects of the flooding. There are still clear challenges that lie ahead in our component supply chain. And to help address the gaps in various product lines, Seagate has worked with its customers and suppliers on aggressive qualifications of new parts and factories, allowing us to match precious supply to end demand.”

Indeed, Dave Mosley, Seagate’s executive vice president of operations, said the hard drive maker has seen more than 200 requalifications just for motor base assemblies. Lead times are longer too. Nevertheless, Seagate is posting strong financial results because relative to rivals it’s in a much better position.

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Posted by Usman Khalid on Feb 6 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.