Western Digital latest move, involving Thailand and Singapore, shows how synergy can be harness from ASEAN’s AEC plan. The hard drive maker will be moving production work to Thailand to take advantage of lower costs, and downsize Singapore’s operations to focus on engineering, and research and development.
- Zdnet.com reports:
Western Digital has retrenched nearly 500 Singapore employees at its enterprise hard drive subsidiary HGST (formerly Hitachi Global Storage Technologies), and moved production to Thailand, in a bid to enhance cost competitiveness.
The Singapore facility currently supports about 40 percent of HGST’s perfomance enterprise hard drive volume production, which will now be mostly shifted to its Thailand plant in Prachinburi province to “take advantage of cost competitiveness”, said HGST in a note to staff.
The move is part of a “facility transformation” where Singapore operations will be repositioned from a mass volume manufacturing site to a Pilot Production, Engineering and Shared Service Center, according to HGST. The Singapore Pilot Production lines will receive new hard drive disk or solid state disk products for further development, quality assurance and testing before passing them on to Thailand for larger scale manufacturing.
Prior to the job cuts, HGST had 2,370 staff in Singapore. The downsizing is in line with earlier moves by storage rivals such as Seagate, who have been phasing out the Singapore’s role in mass manufacturing in favor of R&D.
HGST presence in the country goes back to 1994, when the entity was first a part of IBM Singapore’s Storage Systems Division before its merger with Hitachi in 2003. In 2011, Western Digital acquired HGST in a cash and stock deal valued at US$4.3 billion in a move to strengthen its foothold in the enterprise market. Corporate restructuring and operating expense cuts have since been on the cards, with Hitachi itself struggling with restructuring.