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26Oct/11Off

Bad News for System Builders

It appears as though the flooding in Thailand will bring with it not only humanitarian issues but also severe supply issues. I have just received two emails one from Western Digital and one from Newegg concerning supply shortages. This sounds as though there may be a rough couple of months for us small business' that make a living in this ever dynamic industry.

Newegg:

To Customer:

As some of you may already know, the recent flooding in Thailand has resulted in supply shortages of many hard drives. As a result, we have been limiting all hard drive purchases to one per customer and are listing all internal hard drives as loss leaders until further notice. We want to thank you for your continued support of the Newegg brand. As soon as we have any additional updates, we will let you know. Thank you.

Hideaki Kondo
Affiliate Marketing Manager

Western Digital:

In mid-October we temporarily suspended production at our two factories in Thailand, which have been inundated by floodwater, to protect our employees and our equipment and facilities. We manufacture approximately 60 percent of our hard drives in Thailand. With the greatest direct manufacturing exposure to the flooded areas, the impact on our business in the short term will be greater than to other HDD manufacturers.

In addition, many of our component suppliers have been impacted, leaving material for hard drive production considerably constrained. We are working with suppliers to assess the extent of their impact and help devise short- and long-term solutions. This is a complex and dynamic problem that will require extensive rebuilding for the Thai people and government, and bring unprecedented challenges to the HDD industry for multiple quarters.