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Should pass China within two years
NAREERAT WIRIYAPONG
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.''
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