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WD dries out flood-trashed fab, pumps out first disks

Deadly Thai disaster cost biz at least $50m to clean up

WD has partially restored hard disk production at one of its flood-hit fabs in Thailand and expects to start pumping water from its second facility within ten days.

The drive maker said that power at one of its buildings in Bang Pa-In - which had been under six feet of water since 15 October - was restored on 26 November and production recommenced four days later.

"The passion, perseverance, ingenuity and execution exhibited by the WD team has been extraordinary and enabled us to make substantial progress in partially restoring our operations in Thailand," said WD CEO John Coyne.

WD - which last month enlisted the help of Thai frogmen in a bid to salvage equipment - has also removed submerged disk head slider manufacturing kit from the Bang Pa-In site for "assessment, decontamination and refurbishment", and began work on restoring other buildings on the site.

Head slider fabrication at Bang Pa-In and a new fab location in Penang, Malaysia, will crank out gear from the March quarter. The hard drive production line at WD's Navanakorn facility in Thailand is still under two feet of water and is expected to be "pumped dry" within ten days after which the equipment will be tested.

"Much work remains to be done but we couldn't be more pleased with the effort and results thus far," said Coyne.

WD said "unusual charges" related to the flooding, HGST acquisition expenses and a legal case with Seagate are forecast to cost $225m to $275m this quarter. It expects to file a property damage claim of at least $50m and make an additional claim for lost sales.

The industry is expected to produce approximately 120 million hard drives this quarter, well short of demand, which is estimated to be 170 to 180 million, WD said.

"The company believes that significant industry supply constraints will continue in the March quarter and beyond," it said.

Hard drive prices shot up in the weeks following the flooding, which also wrecked the production of other tech including PCs.

In other Western Digital news, the firm is trying to sell off some 3.5in drive production capacity to meet the conditions set by the European Commission before it finalises the acquisition of HGST, which it reckons should be done and dusted by March. ®

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