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To: richardred who wrote (98)10/20/2011 2:10:29 AM
From: richardred
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Thailand flooding could affect PC supplies, pricesIn Thailand flooding, computer industry takes a hit; hard drive production whacked

SAN FRANCISCO (AP) -- The personal computer industry, already reeling from depressed demand, has been dealt another setback: Massive flooding in Thailand has curtailed production of a critical component -- computer storage drives.

Factories producing a third of the country's hard drives have temporarily closed as flooding has gradually spread since August. Prices have spiked, and Apple warned that its Mac products will likely be affected.

Computer manufacturers, the companies that supply hard drives and the makers of components for those drives are all bracing for troubles. What's not yet clear is what extent PC production lines will be affected and whether PC makers will absorb costs or pass them along to consumers.

Thailand makes about a quarter of the world's hard drives and is the second-largest producer behind China, according to IHS iSuppli. Market research firm IDC estimates that the flooding has already affected a third of the country's output, equating to more than 120 million hard drives a year. Avian Securities says the slowdown is already leading to price spikes that have added several dollars to the cost of some drives.

The flooding has killed 317 people, mostly from drowning. Nearly 9 million people have been displaced or otherwise affected. Estimates of the economic cost were $3 billion and rising.

The setback is particularly acute for the computer industry because it follows other troubles. Demand has slowed, particularly in the U.S. and Europe, because of debt and unemployment fears and the growing popularity of tablet computers, which causes many consumers to delay replacing PCs. In addition, the March 11 earthquake and tsunami in Japan hurt supplies of memory chips.

The biggest hard drive makers -- Seagate Technology PLC and Western Digital Corp. -- have warned of delays.

Western Digital has suspended its operations in Thailand. Floodwaters have affected two factories, which shut down last week. The company said its other hard drive manufacturing facilities, located in Malaysia, are fully operational. But it said flooding will have a significant impact on its ability to meet demand through the end of the year. Western Digital's Thailand operations account for more than half of the company's total hard drive output. Western Digital's stock has fallen 15 percent since the company announced its delays last week.

Seagate says that its factories in Thailand are operational but warned that it is having difficulty getting some components. It said supply will be constrained the rest of the year, though the magnitude of the disruption is currently unclear.

Toshiba has also suspended its Thailand hard disk operations, as have a number of hard disk component suppliers.

Big computer makers are worried.

On Tuesday, Apple Inc. CEO Tim Cook said he is "virtually certain there will be an overall industry shortage of disk drives." But because a thorough assessment of the damage hasn't been possible, he said he couldn't immediately give a timeline for recovery. Cook warned that Apple's Mac lines would be most affected. Most of its mobile devices, including the iPhone and the iPad, use a different type of storage called flash memory.

Dell Inc., the No. 3 PC maker, said it expects minimal impact to supply through the current quarter, which ends this month. The company said it is working with suppliers to assess the impact for the rest of the year. Hewlett-Packard Co., the leading computer maker, said it is monitoring the situation in Thailand as operations there remain open.

Gartner Inc. analyst John Monroe called the disruptions "very serious and ongoing" and said they affect production of roughly half of the "spindle" motors that turn the hard disks, along with other technologies. Monroe expects slowdowns through March.

"We do not know yet what we do not know, many unknown unknowns," Monroe said.

But as was the case with the crisis in Japan, the industry has some manufacturing safeguards for natural disasters. Production is generally spread among several countries. Some analysts were optimistic that the delays would be short-lived.

John Rydning, an analyst with IDC, said that the hard drive industry's supply chain is "highly redundant and remarkably resilient." He noted that the hard drive industry recovered quickly from the Japanese disaster without any major disruption.

"It is premature to say the flooding will lead to potentially billions of dollars in lost revenue," he said in an email. "Not an impossible scenario, but we need to hear more about the clean-up efforts underway before making that call."

Stacy Smith, chief financial officer for Intel Corp., the biggest maker of computer microprocessors, told analysts Tuesday that he doesn't believe there will be an impact on PC sales in the current quarter.

"A combination of alternate supplies and inventory levels will carry us through," he said.

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To: richardred who wrote (101)10/20/2011 12:52:18 PM
From: richardred
   of 105
FWIW-Xyratex, Intevac Rally, As Drive Industry Takes On Water

Xyratex and Intevac shares are both trading sharply higher, in anticipation that the producers of hard-disk drive manufacturing equipment could be a beneficiary from the troubles now plaguing the drive business due to the recent devastating floods in Thailand.

As I noted a previous post, Western Digital late yesterday said that flooding in its factories has forced the company to shut down production, with little hope of returning to normal levels for at least the next few quarters. Western noted that 40% of international drive capacity is produced in Thailand; for Western Digital the total is 60%. As I pointed out earlier today, J.P. Morgan analyst Harlan Sur observed in a research note that other drive makers also are heavily reliant on Thailand, with Hitachi GST producing 60% of its drives there, Toshiba 55% and Seagate 40%. Note that Seagate will report financial results for the September quarter after the close, which should provide some new insights to the situation.

While the long-term impact of the floods on production capacity in Thailand is still uncertain, what seems clear to the Street is that the floods will trigger equipment purchases – either to replace gear damaged in the floods, or to add capacity at facilities in other countries. And if that’s the case, Xyratex and Intevac are obvious beneficiaries.

XRTX shares today are up 68 cents, or 5.3%, to $13.44; IVAC is up 49 cents, or 6.7%, to $7.85.

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To: richardred who wrote (102)10/28/2011 7:29:59 PM
From: richardred
   of 105
Thai floods boost PC hard drive prices

SAN FRANCISCO | Fri Oct 28, 2011 5:49pm EDT

SAN FRANCISCO (Reuters) - Prices for hard drives are jumping as flooding in Thailand creates a shortage of the major component used in personal computers and one big customer is complaining of price gouging.

Drive manufacturers have raised prices by 20 to 40 percent and international electronics distributor Avnet Inc in turn has raised its prices by a similar amount after water poured into factories this month, said Avnet Senior Vice President Chuck Kostalnick.

"The word we're getting is that prices are going to continue to go up," he told Reuters Friday. "This isn't going to be a one-time event."

Flooding in Thailand, the No. 2 exporter of hard drives, has killed at least 377 people since July and devastated industrial areas in the center of the country.

NetGear Inc, which buys hard drives to use in commercial storage devices, in some cases has seen prices charged by distributors more than double from levels before disaster, said Shane Buckley. general manager of NetGear's commercial business.

"Speculators are gouging the market significantly and in some cases making enormous profits out of the people of Thailand's misery," Buckley told Reuters. He declined to say which distributors.

Neighborhood computer repair shops in the United States are also wrestling with scarcity and higher prices for hard drives as lingering inventories are quickly snapped up.

Top hard drive makers Western Digital Corp and Seagate Technologies Plc both have plants in Thailand, where flooding has killed at least 377 people since July and devastated industrialized areas in the center of the country.

Western Digital's factories are closed and Seagate, while its plants are running, warns it could face parts shortages.


World output of hard drives may fall as much as 30 percent in the final three months of 2011 and manufacturers that need them are now scrambling to snap up existing inventories, according to market research firm IHS iSuppli.

PC giants like Apple Inc and Dell Inc buy hard drives directly from Western Digital and Seagate and other manufacturers. Smaller companies, including NetGear, buy components from distributors like Ingram Micro Inc, Synnex Corp, Arrow Electronics, Avnet and Tech Data.

"We're trying to keep this as a neutral situation for us. We're trying not to lose anything through this process," Kostalnick told Reuters.

Fremont, California-based Synnex declined to comment, as did Ingram Micro. Arrow did not comment on its prices and Tech Data did not respond to requests for comment.

Corner retail stores typically buy their components from national-level resellers further down the supply chain from the major international distributors.

A handful of shops contacted by Reuters said prices they pay for a typical hard drive have recently risen from around $60 to $90.

"The places I'm used to getting hard drives from, almost all of them are completely, 100 percent out of drives. The ones that still have them, where I used to buy 25 or 50 at a time, are now limiting me to one at a time," said Craig Marin, owner of The Computer Loft, a Boston repair store.

NetGear and local shops said they plan to pass the cost of more expensive hard drives on to their customers by raising their own prices.

"They're available, just at much higher prices," said David Bensinger, owner of The Little Laptop Shop in New York. "I hope our customers understand."

(Reporting by Noel Randewich; Editing by Richard Chang)

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To: richardred who wrote (103)11/8/2011 11:52:04 AM
From: richardred
   of 105
HDD supply gap to narrow as Nidec resumes some production Erica Yen, Taipei; Joseph Tsai, DIGITIMES [Tuesday 8 November 2011]

Japan-based hard disc drive (HDD) motor supplier Nidec, which contributes close to 75% of the global HDD motor shipments, has announced its Ayutthaya plants in Thailand have already resumed production and sources from the HDD industry believe it should help narrow down the HDD supply gap in the fourth quarter of 2011.

Since Nidec is also increasing its production capacities at plants in Philippine and China to help cover the impact from the floods, the company expects its motor capacity will be able to reach 100 million units in the fourth quarter.

Nidec currently has 10 production bases in Thailand with eight of them have been damaged by the floods. As water started to recede, Nidec announced its Rangsit plants, which stopped operation on October 13, already resumed production on October 25, while Ayutthaya plants also started operating normally on November 4.

Nidec's two plants in Philippine will also see their monthly capacity rise from 15 million units originally to 25 million units with capacity in China plants also increase from 10 million units to 15 million units. However, the total capacity in the fourth quarter will still drop close to 30% from 140 million units in the third.

Before the floods hit Thailand, Nidec's capacity proportions were 62%, 23% and 15% for plants in Thailand, Philippine and China, respectively. In the future, the production proportion of plants in Philippine and China will rise to 36% and 21%, respectively, reducing Thailand's proportion to only 43%.

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From: JakeStraw2/3/2012 1:20:46 PM
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Xyratex Ltd. (XRTX) was upgraded today by analysts at Zacks Investment Research from a "neutral" rating to an "outperform" rating.

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