Thailand may surpass China as a hard drive producer...
With the right incentives...
By Jon Fernquest |
Learn about the up-and-coming computer hard drive industry in Thailand in an article from the Bangkok Post.
Major global players in the industry have had hard drive manufacturing operations in Thailand for decades.
Thailand now has the opportunity to overtake China as the largest hard-drive producer in the world, that is, if the right incentives are given to attract more production facilities to Thailand and not lose the facilities already located and in operation here.
Here is the article in full:
Thailand aims for top in HDD market
Should pass China within two yearsNAREERAT WIRIYAPONG
Tuesday July 15, 2008
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Thailand is expected to surpass China as the world's largest hard disk-drive (HDD) producer within two years after existing HDD makers operating here complete ongoing expansion, the industry's research group says.
However, Thailand should step up investment incentives granted to the cost-pressured data-storage industry to maintain the country's attractiveness in eyes of HDD giants, said Mark Geenen, the founder and president of US-based TrendFocus.
Thailand is home to the world's top three HDD makers - Seagate Technology, Western Digital (WD), and Hitachi Global Storage Technologies (HGST) - which together control three-quarters of the global HDD market.
Figures provided from the Board of Investment (BoI) showed that Thailand's production capacity of HDDs totalled 204.6 million units in 2007, of which 204 million went to overseas markets with a value of $10.55 billion.
Exports reached 60.4 million units in the first quarter of this year, up from 44.97 million in the same period of 2007, with a value of $3 billion against $2.43 billion a year earlier.
"Thailand is currently a close number two after China, but the expansion carried out by WD and Hitachi could make Thailand number one within two years," Mr Geenen said.
WD, the world's second largest HDD producer after Seagate, reportedly has a plan to invest 33.85 billion baht from 2006 to 2014 to expand its Thai base including the first phase of 15 billion baht to raise the capacity to 56 million drives a year. Then, the US firm would lift HDD output to 102 million units, together with the production of 80 billion uncoated wafers and other products.
HGST has spent $200 million increasing its annual HDD output to 60 million by 2008 and plans to spend another one billion baht this year for manufacturing upgrading.
"Thailand is an attractive investment location for HDD investment with technical and supply infrastructure improving dramatically in recent years. Labour is plentiful and the location of Thailand is close to customer sites in the region," Mr Geenen said.
"[But] costs will continue to be pressured, so the Thai government must be aware of this trend and offer ever-better incentives that provide ongoing savings for HDD companies, said Mr Geenen, a former chief of the International Disk Drive Equipment and Materials Association (IDEMA). Globally, shipments of HDD are forecast to grow by 13% over 2007 to 570 million units with a value of $36 billion, driven primarily by increased shipments of notebook PCs.
The industry expects to continue to expand to 640 million and 715 million units in 2009 and 2010, with revenue of $41 billion and $45 billion, respectively, said Mr Geenen.
"TrendFocus believes that the macroeconomic problems in the US would affect PC demand for the balance of 2008," he said. "This could slow unit growth expectations by 1-3% because consumers are expected to spend less on products like PCs and consumer electronic devices."
(Source: Bangkok Post, business, 15-07-08, NAREERAT WIRIYAPONG, temp-link)
Vocabulary:
a hard disk-drive (HDD) - the device used to store data on every computer (See Wikipedia)
up-and-coming - likely to be successful in the future
major global players in the industry - the largest companies in the industry from around the world
overtake China - pass China, do better than China (higher hard drive production than China in this case)
incentives - rewards to encourage people to do something (See glossary)
incentives granted - incentives given
surpass - pass, go beyond, do better than (See "overtake" below)
step up investment - increase investment
the data-storage industry - companies that produce computer storage devices such as hard drives and also flash drives which are becoming more popular
cost-pressured data-storage industry - the industry must reduce costs to remain profitable
TrendFocus - a consulting firm specialising in the data storage industry that provides "market intelligence" to subscribers and also sells reports on specialised topics (See website)
intelligence - information gathered secretly about a company's competitors or a country's enemies
market intelligence - information about what companies are doing in a given market or industry
subscribers - people who pay a monthly fee to receive a service or to receive a magazine or newspaper
Seagate Technology - the largest manufacturer of hard drives and storage solutions, founded in 1979 and based in Scotts Valley, California (See Wikipedia)
Western Digital (WD) - the second largest manufacturer of hard drives (See Wikipedia)
Hitachi Global Storage Technologies (HGST) - the Japanese electronics company Hitachi purchased IBM's hard disk drive division, integrated their own HDD operations, and launched the new company in January 2003, headquartered in San Jose, California, USA (See Wikipedia)
Board of Investment (BoI) - the Thai government agency responsible for providing incentives to encourage investment in Thailand (See website)
(See website)
production capacity - the greatest amount of goods that can be produced given the current production facilities (factories, equipment, machines, transportation) of a company
facilities - buildings, equipment, or services provided for a special purpose (See glossary)
raise the capacity - increase production facilities so that the greatest amount that can be produced is even greater
a wafer - a thin and flat piece of something (for example, bread or metal)
a silicon wafer - a thin slice of semiconductor material, such as a silicon crystal, used in the fabrication [building] of integrated circuit and other microdevices (See Wikipedia on wafer electronics)
uncoated wafers, uncoated silicon wafers - the plain wafer before it is used to build a microelectronics device
upgrade - improve and make up-to-date (See glossary)
manufacturing upgrading - improving manufacturing facilities and making them up-to-date
up-to-date - the latest, the most recent thing of its kind, opposite: out-of-date
infrastructure - the basic services and facilities that make everyday operation possible (See glossary)
technical and supply infrastructure - the basic services and facilities for: 1. the technical part of running a business (engineers, special equipment), and 2. providing a supply of the necessary parts and materials, either importing from other countries or manufacturing domestically
