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Thai Flooding to Raise Computer Prices

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Download Thailand is a centre for high-tech manufacturing and massive flooding in the past month has inundated industrial estates around Bangkok which make computer, camera and automotive parts.

Now, leading manufacturers such as Toshiba and Western Digital are predicting sharp price rises after more than a quarter of the world's hard drive production was wiped out.

It will take months to repair the damage.

Zoe Daniel, South-East Asia correspondent for Radio Australia reports.


It was a desperate fight. The Army, the staff, the volunteers, all working together to protect factories and livelihoods. But in the end, it was a battle lost.

A series of industrial estates to the north of Bangkok gave way to the force of the water.

Microelectronics company Hana has been producing 15 million units per day, their products used in cameras, computers and phones among other things.

Chief executive Richard Han says since the flood, output is down to one million. The main factory at Ayutthaya stripped and submerged.

“These are very heavy pieces of equipment averaging between 800 kilos and two tonnes which had to be hoisted out onto a raft and sailed out of the industrial estate and put on truck and then driven down here in the road which in itself was flooded. So, it's just extraordinary, a surreal exercise.”

The worst monsoon in decades has flooded thousands of factories. About 700,000 jobs are lost.

Hana has vowed to keep all its staff, but continuing to operate has been a logistical nightmare.

“This is a business where cleanliness is very, very important. And so you're in a situation where you're loading machines in and you've got forklift trucks coming around and yet you're trying to keep the place clean. So it's a very, very difficult situation. And ordinarily, you know, it's like working in the hospital with workers walking around with muddy boots.”

It may take a year to get back to full production.

“As a rough guide, I think by the middle of this - by the middle of next year we could be running at 50 to 60 per cent, say seven to - seven to eight million units a day. And then over the course of the second half of next year, we could ramp up. I really believe that some of my customers will not bring all the business back because they've had to move it to my competitors, to be honest.”

Analysts expect a shortage of key computer components will push prices up in the short term because the floods have wiped about 30 per cent of global hard drive supply.

“They can adjust, but in short term, I think its hurt a bit. But I think in the future maybe the big company of the world, maybe they locate some production to another country to reduce the risk of flooding.”

The two hardest hit hard drive manufacturers are Toshiba and Western Digital, who together hold 45 per cent of the mobile device market.

Western Digital makes 60 per cent of its product at two Thai factories, both of which have shut down.

It's expected that shortages related to their lack of production will kick in early next year and could increase prices by more than 10 per cent until supplies get back to normal, but that'll take three to six months at least.

As the water recedes, you can see just how destructive this flooding has been. Around me are drums of chemicals, various forms of packaging, electronic components and medical supplies, all pushed here by the force of the water, which at its peak was about the height of me.

Already computer manufacturer Dell has put out a price warning due to the impact of the flooding.

Last Updated ( Monday, 28 November 2011 10:18 )  

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