Hard disk drive maker forecasts more supply chain disruption

1 December 2011

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1 December 2011 | Angeline Albert

Seagate Technology has said its ability to supply hard disk drives will be “significantly constrained” for the next two quarters because of severe flooding in Thailand.

In an update on its financial outlook for the December 2011 and March 2012 quarter-ends, published this week, the US firm said its component and disk drive factories in Thailand have not been directly affected by floods but its ability to manufacture has been hit by external component supply constraints.

It said it continues to work with its external suppliers to restore the component supply chain and now expects that in the March quarter it will be capable of shipping a mix of products “in terms of capacity per drive and expected market, similar to pre-flood levels”.

The company said that despite the fact demand is estimated to significantly exceed supply during this time, pricing is expected to remain stable.

Seagate believes the industry’s ability to manufacture and ship hard disk drives will gradually improve during 2012.

Flooding began in July, affecting many businesses in Thailand, which is a global manufacturing base for the automotive and electronics industries.

Seagate expects to ship about 43 million units in the December 2011 quarter with revenue of $2.8 billion (£1.7 billion). For the March 2012 quarter, it said it plans to deliver revenue of $3.75 billion (£2.3 billion) with unit shipments increasing gradually. Seagate’s outlook excludes its acquisition of Samsung Electronics Co’s hard drive business which will have been completed by the end of December.


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