Last year, Thailand was rocked by floods that devastated the country. It destroyed cities and towns and put a severe dent in Taiwan’s manufacturing industry. Hard drive manufacturing was hit the hardest and shortages in the supply of drives started to surface last year. This deficit is impacting tech companies from Western Digital to Intel and AMD.
According to Macworld, Western Digital recorded US$199 million in charges and expenses from the floods and its hard drive manufacturing plants are still trying to recover. As a result, hard drive shipments fell from 57.8 million drives in Q3 2011 to 28.5 million drives in Q4. Intel’s business slowed as computer makers like HP lowered their microprocessor orders. Even AMD’s GPU business, which uses components made in Thailand, fell 10 percent in the last quarter because of this manufacturing slowdown.
Unlike other tech companies, this shortage will have little impact on Apple’s computer business. CEO Tim Cook confirmed in yesterday’s earnings conference call that Apple will see little financial impact from this disaster. The company will pay more for its supply of hard drives, but it can secure the drives that it needs for its computers. It helps that Apple has moved several of its computer models to SSD, which is not affected by the floods. It also doesn’t hurt that the company has a $97 billion cash reserve to absorb this extra manufacturing cost. For the financially-minded, this extra cost is already calculated in Apple’s Q2 2012 guidance.
Results of Thailand floods still affecting tech industry originally appeared on TUAW – The Unofficial Apple Weblog on Wed, 25 Jan 2012 13:30:00 EST. Please see our terms for use of feeds.