Hitachi Global Storage Tightens Belt

The Japanese storage company's plan to consolidate hard disk production in Asia will not lead to new jobs in the region

Hitachi's plans to consolidate its hard disk production and move manufacturing activities to Asia will not create more jobs in the region, according to company officials.

Last week, the Japanese storage company announced it would cut 4,500 jobs as part of a plan to boost hard disk production by 13 percent this year. Production undertaken at its Guadalajara, Mexico, plant will be shifted to existing plants in China, the Philippines and Thailand.

Robert Chu, Asia-Pacific vice president of Hitachi Global Storage Technologies (GST), said the company does not expect to create new jobs at its Asian plants as a result of the manufacturing consolidation.

"The current large workforce we have in the Asia-Pacific will be able to absorb the new, and expanded, missions," Chu told ZDNet Asia in an e-mail interview. "There will be significant investment in executing the mission transfers."

For example, personnel at Hitachi's Philippines plant in Laguna--which makes hard disk sliders--will undergo additional training totalling an estimated 94,000 man hours, to prepare for the additional slider capacity. The hard disk head is mounted on a slider.

The facility will triple its slider capacity within two years, producing 85 percent of Hitachi's worldwide slider requirement, Chu noted.

"Currently, the Laguna site produces about 20 percent of Hitachi's sliders and in the last year, the facility reached a critical time-to-market milestone, improving manufacturing turnaround time three-fold over three years," he said.

By the end of this year, the company's Shenzhen, China, disk-producing plant will receive production loads from the Odawara, Japan facility, Chu said. In addition, Thailand will also start producing 2.5-inch automotive hard disk drives this year.

By putting manufacturing sites--responsible for component production to final hard disk drive assembly--in close proximity in Asia, Hitachi will improve overall competitiveness in areas such as time-to-market and time-to-volume, Chu noted.

"In addition, consolidation of development will help to accelerate the roll out of future technologies such as patterned media and thermally-assisted recording," he added.

He noted that Hitachi will gain nearly US$300 million in savings as a result of its planned manufacturing and development changes.

In addition, Chu said, the company is expecting non cost-related benefits from the more efficient and productive manufacturing process, ranging from component manufacturing to final hard drive assembly. These efficiencies are expected to result in shortened manufacturing processes and higher product yields.

"Asia has always been and will continue to be a main [focus for] Hitachi GST, both as a market opportunity and as a base for manufacturing operations," Chu said. "It constitutes the vast majority of [the company's] manufacturing output--and puts us in a stronger position to meet customer needs."