In late October, Hardware Canucks reported that retailers were raising their prices on Hard Drives because flooding in Thailand had shutdown a number of key production facilities. Now, Seagate’s CEO is forecasting that it could take up to a year for the industry to return to pre-flood production levels.
Two of Seagate’s main competitors – Western Digital and Toshiba – have production facilities in the industrial heartland immediately north of Bangkok, which also happens to be a floodplain. This area was hit the hardest, wiping out employee’s homes and destroying sensitive equipment in the factories.
Seagate, however, has its operations in Teparuk, an area of Thailand that has been uncharacteristically dry. As a result Seagate has the majority of its capacity intact, though has shortages from some suppliers who have had their factories flooded.
“It’s going to be very interesting to see who gets drives and who doesn’t,” said Seagate CEO Stephen J. Luczo to Bloomberg. Luczo claims he has been talking with customers who are eager to lock up some of Seagate’s excess capacity, even at higher prices.
Luczo told Bloomberg that he is also considering requiring all Seagate suppliers to move their operations outside of the flood plain, to avoid a repeat of this incident. Seagate is reportedly fronting loans to some suppliers as an incentive to move their operations, and get them back online.
“People are going to appreciate the complexity of this business,” Luczo remarked.