Stefan Mileschin

Western Digital this week announced plans to shut down its HDD assembly facility (near Kuala Lumpur, Malaysia) by the end of 2019, and then sell the property. The factory has been used for several decades, but Western Digital says that the total available market for client hard drives has been shrinking in the recent years and will continue to do so in the coming years, which is why it does not need the extra manufacturing capacities that it will not be able to use.

Western Digital is a vertically integrated maker of hard drives. The company produces all the components of HDDs in-house, everything from media substrates to platters and from head substrates to HGAs (head gimbal assembly) and HSAs (head stack assembly). Obviously, it performs final assembly and testing too. At present Western Digital has three factories that produce hard drives: the largest one is located in Bang Pa-In (Thailand), the second largest one is situated near Kuala Lumpur in Petaling Jaya (Malaysia), and the smallest one is sited in Prachinburi (Thailand). Meanwhile only the largest one is more or less vertically integrated and makes not only HDDs, but also many of their components (see the table below for details).

The total available market of hard drives dropped to around 400 million units in 2017, down from around 550 million units in 2014. As a result, both Seagate and Western Digital have been reducing their HDD manufacturing capacities in the recent years. Seagate shut down its HDD assembly factory in Suzhou, China, in 2017, whereas Western Digital closed down its head wafer facility in Odawara, Japan, in 2016. While the HDD TAM has been on the decline for years now, sales of nearline hard drives featuring a massive capacity for datacenters have been growing. Therefore, neither Western Digital nor Seagate have plans to limit production of these products.

https://www.anandtech.com/show/13097...uction-of-ssds