Last Sunday, we flagged in the chat that there was a repeat of the 2011 floods in Thailand, which previously affected WDC more than STX because their facilities were in more flood prone areas. We noted that a Fortune 500 should have hardened flood resilience since then (such as by building this flood wall) but it remained an issue to watch.
Thai readers weighed in, noting that the rain was less severe than in 2011. However, as of this weekend, the Bangkok Post is reporting that flood impact is more severe than expected, that flooding has persisted, and that more rain is coming. Even if a facility is not flooded, flooding can significantly disrupt operations.
A WDC short ended up working but for dramatically different reasons. A Nikkei reporter in Manila was covering the first shipment of HDDs from a facility in Manila, writing:
Toshiba will double its production capacity for hard disk drives (HDDs) for artificial intelligence (AI) data centers by fiscal year 2027. The company will invest approximately 60 billion yen to expand its Philippine factory.
The reporter then expressly says the comments from Toshiba appear to be intended to encourage the factory floor:
At the [first shipment ceremony], Vice President Koji Iketani… encouraged the factory floor by saying, "Expanding our nearline HDD production capacity is an important milestone toward achieving our goals. Achieving a 30% global market share is not a pipe dream."
The official release says nothing about market share ambitions, only an aim to double production on a storage capacity basis:
TIP will continue to invest in production expansion, aiming to nearly double its annual production capacity by FY2027 compared with FY2025 on a storage capacity basis.
Bernstein noted that if Toshiba does double exabyte production, assuming WDC and STX grow in accordance with their own long term plans, Toshiba share of exabytes would grow from 11.2% to 16.8%, not 30%. The firm also observed that Toshiba market share fell from 17% to 11% today after it announced 30% market share ambitions in 2022.
We roundup HDD takes from Nikkei, Citrini and others below, and cap off with a short note on ABF and Testing.
I have coffee with some Thai and Filipino business leaders in an hour. If there is a material update it will be in the chat.