Thailand Flooding have Disrupted the Supply Chain

Published:2011/10/18 20:56:00 Author:Phyllis From:SeekIC

The overall supply in Thailand has been influenced due to the ongoing severe flooding. Factories and supply chains are facing disruption as Thailand’s economy starts to affected by the worst flooding in decades.

The typhoon-driven flooding has whipsawed the Southeast Asian country since late July, killing more than 315 people, affecting more than three quarters of the country’s provinces and inflicting billions of dollars in damage. Flood waters from higher ground in northern and central Thailand are now menacing the capital Bangkok.

Many companies have been forced to suspend production in central Thailand because of the floods. Most of the factory closures are due to disruptions to local supply chains. Two-thirds of Thailand is affected by the floods, and many people have lost their lives since July. There were no details from the tech industry just how severe the supply constraints will be.

Hard disk drive maker Seagate Technology has warned that a disruption in its supply chain could affect production, although its factories in Thailand are still in operation.

Seagate continues to operate its factories in Thailand, and employees are getting to work, the company said. But its hard disk drive component supply chain is getting disrupted, and supply of certain components could be affected, it added.

A Seagate spokesman said that the company also manufactures its products in China, Singapore, and Malaysia. But he would not break out how many drives are made by its factories in Thailand. Seagate will provide further updates during its quarterly conference call on Oct. 20.

Competitor Western Digital said it had suspended production of hard drives temporarily at facilities close to Bangkok, to protect employees, facilities and equipment. The company said that production of hard drives in its facilities in Thailand will be constrained in the current quarter due to the flooding.

In the quarter to July 1, Western Digital shipped about 54 million hard drives from its facilities in Thailand and Malaysia, with approximately 60$ coming from its Thailand sites.

Microsemi, a semiconductor company in Aliso Viejo, California, said that one of its subcontracted manufacturing facilities located in the Rojana Industrial Park in Ayutthaya, north of Bangkok, has suspended operations due to damage sustained from flooding.

ON Semiconductor, another tenant of the Rojana Park, announced that operations of its Sanyo Semiconductor division in the park, have been suspended as a result of the flooding.

Hutchinson Technology said that its assembly operations in Ayutthaya have been temporarily suspended due to rising floodwaters in the Rojana Park where the company’s plant is located. It said it was moving its production to its U.S. assembly operations, and using existing inventory to meet customer demands, after water entered its assembly plant.

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