[Mr Medved]

I only found out yesterday about this. It's completely buggered my intentions to buy an 8 or 10 bay NAS. You'd think they'd be smarter than having all factories in a flood area, or maybe I am understating the level of floods received in Thailand.

http://www.skynews.c...?id=698620&vId=


Thai floods leave tech firms pondering

Updated: 12:11, Tuesday December 20, 2011

Thailand's floods crisis is exposing just how heavily the world's technology sector leans on a drab industrial zone north of Bangkok.

As the last floodwaters recede, after killing 600, the crisis is exposing just how heavily the world's technology sector leans on a drab industrial zone in a floodplain north of Bangkok.

If certain PCs, hard drives or other electronics are suddenly more expensive or backordered in your city, chances are their production relies on Thai factories recovering from neck-high floods.

The pungent waters, which shut down more than 800 factories employing roughly 450,000 workers, are now struggling to repair or replace equipment left soaking for weeks.

Fixing all that highly specialised equipment will take months. The supply shortage and resultant price hikes, according to analysts, could last well into next year.

'Frankly speaking, we've realised with hindsight that we're in the wrong place,' said Richard Han, CEO of Hana Electronics. 'We're in a flood zone.'

For investors, this is a frightful realisation: Floods can wipe out an industrial sector that stands as a pillar of Thailand's export-driven economy and a crucial link in the global supply chain.

Hana is Thailand's largest maker of semiconductors, used in mobile phones and tablet computers, and it's located in one of the many industrial parks recently submerged by heavy flooding.

As dykes around his complex burst, Han and his counterparts evacuated their pricey machinery on Thai Navy boats deployed to save drowning factories.

California-based Western Digital, the world's largest maker of hard disc drives, took an even harsher beating.

While not quite a household name, the firm supplies many firms that are: Dell, Intel, Apple and others.

Roughly 30 per cent of all the world's disc drives are made in Thailand, where cheap-but-skilled labour and tax breaks have attracted foreign-owned factories to the industrialised provinces north of Bangkok.

About 60 per cent of Western Digital's hard drives are made in Thailand, according to the firm, and all of its six factories were affected by flooding.

When their production suddenly stopped, a global shortage ensued. Some Western Digital hard drives shot up as much as 80 per cent and prices remain inflated.

Only this month did the company manage to haul undamaged equipment into a single factory, churn out hard drives and announce production had resumed.

The company may suffer up to $US275 million ($A276.26 million) in costs, according to public statements, which forecast supply constraints continuing into 'the March quarter and beyond'.

Another tech giant, Intel, has cautioned that its fourth quarter revenue will miss its own target by roughly $1 billion, a shortfall it connects to a supply chain shake-up caused by the Thai floods.

As a result, industrial park operators are scrambling to gird themselves against future floods.

Two major factory estates are now building permanent dykes: One $63.7 million barrier at an estate called Rojana Industrial Park, another $19 million barrier protecting the Nava Nakorn complex.

But walling off industrial zones, Han said, will only turn these complexes into little islands if floods return.

The outside waters will prevent supplies and workers from entering and stop factories' finished products from exiting.

'Companies are not going to put all their eggs back in the same basket,' Han said. 'No matter what kind of wall you have.'

According to an economist and visiting professor at Bangkok's Chulalongkorn University, Sethaput Suthiwart-Narueput, there is good news: 'Economies hit by natural disasters tend to recover relatively quickly,' he said.

'Much more than if they get hit with something like a banking crisis.'

But epic flooding is just the latest disaster to afflict Thailand, Southeast Asia's second-largest economy. Thailand's mounting year-after-year crises, Sethaput said, are adding up.

Last year, investors were rattled by anti-establishment street protests ending in a violent army crackdown, 91 deaths (mostly of protesters) and an arson spree in a Bangkok commercial district.

In 2009, projects at an industrial estate called Map Tha Put were halted under suspicions of severe pollution. And in 2008, a nationalist mob sieged and shut down Bangkok's chief airport, shuddering the economy.

The economy, Sethaput said, has suffered from 'our masochistic ability to inflict harm upon ourselves ... all of which, compounded by the flood, has contributed to, shall we say, a less than conducive atmosphere for investment'.

So far, only two foreign companies have moved out of Thailand since the flooding began, said Atchaka Brimble, secretary-general of Thailand's Board of Investment.

But she concedes that the crisis has put Thailand on the defensive, especially as regional rivals such as Malaysia and Vietnam are more aggressively courting foreign investment.

'We're trying to convince investors,' she said, 'that Thailand is still the prime investment location in Southeast Asia'.

[Peachy]

The knowledgeable chaps on Whirlpool seem to think that hard drive prices should return to pre-flood levels in a couple of months (by March, say).

So that 10 bay NAS may only be slightly delayed.