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After the Floods, a Sea of Disk Drive Shortages

Seagate’s CEO predicts prolonged shortages after Thai floods

Compared to the scores of companies in the disk drive industry with operations in Thailand, Seagate Technology is lucky. Only 180 of its 15,400 workers are among the 13 million people whose homes have been swamped. The floodwaters that have engulfed much of the industrial heartland north of Bangkok for the past six weeks have spared both of Seagate’s sprawling Thai factories. In fact, the weather at Seagate’s plant in Teparuk, which is outside the flood zone, has been uncharacteristically dry, says Thailand country manager Jeffrey D. Nygaard.

Still, Seagate Chief Executive Officer Stephen J. Luczo is forecasting difficult times for the drive industry. Each of the hundreds of thousands of drives Seagate’s Thai factories ship every day contain parts from 130 or so suppliers, many still under three feet of water. The projections by some Wall Street analysts that production will be back to pre-flood levels by summer is nonsense, Luczo believes. “This is going to take a lot longer than people are assuming, until the end of 2012 at least,” he says. “And by then, demand will have gone up.”