Thailand Floods: Hard drive makers fall victim to the natural calamity – Part 1

The Monsoon flooding in Thailand last October took a toll on many businesses if not all of them. The main victims of the catastrophe ranged from automobile makers with the likes of vendors of Toyota and Honda to electronic makers like hard drive manufacturers. More affected by the ordeal US population, being the biggest market for commodities from cars to computers to smartphones.

One of the larger questions for tech companies going into fourth quarter earnings revolved around hard drive shortages and whether the supply chain could adapt after flooding in Thailand.

Answering that question is still fairly tricky. Why? There were no uniform trends. Some companies thrived and a few struggled. Seagate was a clear winner. Western Digital held up better than expected. Meanwhile, other companies such as Sony—a financial basket case to start with—flopped.

The takeaway here is that October’s flooding in Thailand continues to whack the technology industry. But the impact is far from uniform.

Here’s a tour of how the Thailand flooding affected three tech giants.

Sony CFO Masaru Kato said on the company’s fiscal third quarter earnings conference call from Tokyo Thursday:

“The floods in Thailand were one of the major factors behind the significant decrease in sales and deterioration in operating results for the quarter. Several overall manufacturing facilities incurred direct damage, resulting in halt in production and the delayed launch of certain products.

“Moreover, the supply chain across the entire industry was impacted and the demand decreased as companies we do business with were affected. The decrease in sales and significant deterioration in equity in net income of the affiliated companies caused us the record operating loss for the quarter.”

In short, Sony’s consumer product and services unit saw sales fall 24 percent from a year ago. Of course, there was weakness in Sony’s TV business as well as PlayStation sales. The Thailand floods hurt the quarter, but can’t be blamed for everything.

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Posted by Usman Khalid on Feb 6 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.