Thailand flooding impacts electronics supply chain

By Freddie Pierce
The horrific flooding in Thailand is affecting more than just the automotive supply chain. The electronics supply chain, most notably hard-disk drive m...

The horrific flooding in Thailand is affecting more than just the automotive supply chain.

The electronics supply chain, most notably hard-disk drive manufacturer Western Digital, is experiencing all kinds of problems in its operations. The company said earlier today that it's suspending its business in Thailand because of the floods.

As the world’s largest provider of hard-disk drives, a hiccup in the Western Digital operation could have enormous supply chain impacts from all over the world. Approximately 60 percent of the company’s product comes from its Thailand plants, adding to the dire situation.

THAILAND’S WORST FLOODING IN DECADES

“If this lingers on more than a quarter, there could be outright product not available,” Needham analyst Richard Kugele told the Wall Street Journal. “Right now there’s definitely pretty dramatic shortages and pricing is increasing significantly.”

Rising floodwaters affected Western Digital plants in Pa-in Industrial Park and Navanakorn Industrial Park, though the company says facilities in Malaysia, Singapore and the U.S. are fully operational.

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Other electronic supply chain members impacted by the Thailand flooding include hard-drive disk rival Seagate Technology and chip manufacturers ON Semiconductor and Microsemi.

Thailand’s automobile supply chain saw its operations badly snarled by the damaging flood waters. Honda, Toyota and Ford were among the largest companies impacted, while General Motors and Nissan had their Thailand operations relatively uninterrupted.

The 2011 Thailand floods are the worst to strike the nation in 50 years. Professionals from around the world are going to have to use some pretty nifty supply chain management maneuvers to ensure that global trade is not entirely disrupted by this latest disaster.

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