The flood in Thailand threatens the PC industry with deficit

The industry of production of personal computers which is already in a depression can receive one more strong blow. The large-scale flood in Thailand can break production of crucial components – storage disks.

The enterprises which release a third of the hard drives made in the country are already temporarily closed as the flood gradually extends  since August. The prices grew, and Apple already stated that current situation will influence production of Mac computers.

Computer makers, suppliers of hard drives and component manufacturers for these disks faced serious problems. It is not clear yet, the chain of production of the PC will how strongly suffer as a result and also whether independently producers will repay all costs or will shift them to clients.

Thailand produces about 25% of all hard drives in the world, it is the second in value producer after China, according to IHS ISuppli. The Research Firm IDC stated that the flood affected 30% of production capacities of Thailand that is equivalent to 120 million zhetsky disks a year. The prices of hard drives grew by several dollars.

Photo: Associated Press
Workers of the plant in Thailand try to build from bags with sand an obstacle in the industrial zone on the outskirts of Bangkok

317 people became the victims of a flood in Thailand already. About 9 ml of people were forced to leave the houses. The economic flood damage is assessed at $3 billion, this digit constantly grows.

Meanwhile the industry of production of the PC has also other serious problems. The consumer demand decreases, especially in the USA and Europe at the expense of domestic economic problems, unemployment and growth of popularity of tablets. Besides, the earthquake and a tsunami in Japan for a long time put on March 11 debugged chains of production and deliveries of microchips out of action.

The largest producers of hard drives — Seagate Technology PLC and Western Digital Corp – warned about delays in delivery. Western Digital suspended the activity in Thailand: floods affected two factories of this company which were closed last week. Production capacities of the company in Malaysia, fortunately, work in full. Nevertheless, Western Digital stated that it will be very difficult to it to meet demand up to the end of this year. It manufactures more than 50% of hard drives in Thailand. Stocks of the company already dropped by 15%.

Seagate stated that its plants in Thailand work so far, but the company already had problems with receiving some components. Toshiba also suspended all transactions with hard drives in the territory of Thailand.

PC makers are seriously concerned by a situation. The CEO of Apple Tim Cook .otmetit that deficit of hard drives will begin with high probability. Most production Mac as smartphones and tablets use other type of memory will suffer, he said. Dell and HP said that they control a situation so far.