Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Factories are submerged in floodwaters at the Rojana industrial district in Ayutthaya, central Thailand, Monday, Oct. 24, 2011. (Sakchai Lalit/Sakchai Lalit/The Associated Press)
Factories are submerged in floodwaters at the Rojana industrial district in Ayutthaya, central Thailand, Monday, Oct. 24, 2011. (Sakchai Lalit/Sakchai Lalit/The Associated Press)

Thai floods may disrupt global electronics supply chain for several quarters Add to ...

Global electronics firms expect supply disruption caused by flooding in Thailand to continue for several quarters and the Thai operations of Japan's Toshiba Corporation are expected to resume in January at the earliest, executives said.

Toshiba has had to halt operations at nine production plants at the Bangkadi Industrial Park and another plant at the Nava Nakorn estate, both in badly flooded Pathum Thani province to the north of Bangkok.

More related to this story

Bangkadi Industrial Park is the major production center in Southeast Asia for Toshiba Corporation. Its factories make home appliances, semiconductors and lighting products.

“We expect to resume operations in January at the earliest,” Kobkarn Wattanavrangkul, chairwoman of Toshiba Thailand, told Reuters. “We're talking about 45 days after the water recedes. But whether we achieve that is still in question.”

Mr. Kobkarn, also chairwoman of the Bangkadi estate, which Toshiba owns, said a Toshiba plant in Nonthaburi province was still operating as normal.

Seagate Technology's operations in Thailand are running as normal and its production is not constrained by either internal component supplies or by its ability to assemble finished products, it said in an emailed response to Reuters queries.

But it still faces problems.

“Rather, we are constrained by the availability of specific, externally sourced components. As a result, industry demand will significantly outstrip supply at least for the December quarter, and the supply disruption will continue for multiple quarters,” it said.

Seagate, which competes with Western Digital for the title of the world's largest maker of hard drives, has two production plants in Samutprakarn and Nakornratchasima provinces, away from the flooding in central provinces and northern Bangkok.

In contrast, Western Digital's two plants in Thailand have been forced to close due to floods and they account for about 60 per cent of its global output.

Lenovo Group Ltd., the world's second-biggest PC maker, said on Wednesday it expected some constraints on hard disk drive supplies through the first quarter of next year after severe floods in Thailand crimped global supply.

The floods have forced the closure of seven industrial estates in Ayutthaya, Nonthaburi and Pathum Thani provinces bordering Bangkok, causing billions of dollars of damage, disrupting supply chains and putting about 650,000 people temporarily out of work.

The Thai private sector has worked on plans to protect other estates in eastern Bangkok from flooding, including Bangpoo, Wellgrow and Lad Krabang, said Payungsak Chartsuthipol, head of the Federation of Thai Industries.

Some electronics makers have turned to Chinese suppliers to help with supply chain problems.

“We shifted to import from suppliers in China and keep our production running,” Delta Electronics (Thailand) Pcl director Anusorn Muttaraid told Reuters.

Delta, part of Taiwan-based Delta Electronics, has two facilities at Bangpoo Industrial estate at Sumutprakarn and Wellgrow Industrial estate at Chachoensao, east of Bangkok.

Mr. Anusorn said he expected limited impact from flooding because its factories were located in high areas where water could run down to the sea, but he expected margins and profit growth might be affected by an increase in freight costs.

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular