Thailand surges could create laptop shortage

Canon's factory north of Bangkok is among 100s of manufacturing facilities influenced through the surges in Thailand.

NEW You are able to (CNNMoney) -- Just once the electronics industry had finally retrieved from Japan's massive earthquake captured, devastating flooding in Thailand has once more stymied manufacture of several key electronic devices components.

Thailand can serve as an electronics manufacturing hub for 100s of companies, particularly for individuals located in Japan. Suffering its worst flooding in decades, Thai manufacture of hard disk drives, cameras and microchips originates to some dead stop.

The disruption is delivering shockwaves with the industry, which is likely to impact the supply of other products like laptops and hang-top boxes.

Irvine, Calif.-based Western Digital (WDC, Fortune 500), the worldwide hard disk leader, is anticipated to become one of the toughest hit companies operating in the area. The organization has a couple of its primary manufacturing facilities in Thailand, and ton waters joined both facilities, submerging a lot of the business's equipment in a single location. Production at both facilities continues to be suspended since March. 12.

With greater contact with the flooded areas than its competition, Western Digital will probably lose its top place within the hard disk market this quarter. It'll most likely get knocked lower so far as third place, based on an IHS iSuppli forecast launched Monday.

"This can be a disaster of unparalleled scale," John Coyne, Western Digital's Boss stated on the business call with experts two days ago. "The flooding in Thailand presents us with a number of daunting challenges throughout the following several quarters."

Shares of Western Digital have fallen 9% because it suspended production in Thailand, and the organization stated it might not have the ability to meet customer interest in its items this quarter -- even while overall hard disk demand is anticipated to flat-line.

The hard disk drives which are produced by Western Digital, Toshiba, along with other more compact gamers within the areas influenced through the flooding mostly are created for notebook and netbook computer pcs. Since PC sales have declined this season, laptop suppliers have sufficient way to obtain hard disk drives that may last with the quarter.

However the influenced companies have stated that production will probably be disrupted not less than six several weeks. Consequently, IHS iSuppli stated there might be lack of notebook computers within the first quarter of 2012.

Any shortage could be short-resided, however. By March, suppliers will in all probability have exercised methods to the hard disk shortage, including using hard disk drives from different companies produced in different regions as well as switching to Expensive memory like this utilized in Apple's (AAPL, Fortune 500) Mac laptop Air laptops.

Additionally to hard disk drives, Thailand hosts the manufacturing procedures of countless camera companies, including Canon (CAJ), Nikon and The new sony (SNE). Production whatsoever three companies' facilities have either been suspended or seriously disrupted because of the ton.

On the business call with experts a week ago, Toshizo Tanaka, Canon's chief financial officer, stated the organization needs to create 100,000 less full-sized cameras and a million less compact cameras this season because of the surges.

Overall camera deliveries will probably fall within the next six several weeks consequently, IHS iSuppli forecasts.

American semiconductor providers On Semiconductor and Microsemi happen to be considerably influenced through the flooding, and Rohm and Toshiba also have taken popular for their nick production. Though Japanese clients might be influenced with this, the worldwide impact will probably be minimal.

Electronic devices producers aren't the only real ones to manage production delays because of the Thailand surges. Car manufacturers Toyota (TM), Ford (F, Fortune 500), Nissan, Honda (HMC), Mitsubishi yet others also have stopped production in the united states, as facilities happen to be uncovered towards the rising waters.

Consequently, IHS iSuppli anticipates a production lack of between 130,000 and 205,000 cars and small trucks in the firms that manufacture automobiles in the united states. 
First Released: November 1, 2011: 2:00 PM ET

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