Western Digital has begun producing hard drives after months of halted production due to extensive flooding in Thailand. The announcement has sent shares skyrocketing as the company gears up for the Christmas shopping season.
Western Digital has begun making hard drives again after months of halted production due to disastrous flooding in Thailand.
The data storage company said it had begun partial production of hard drives a week ahead of schedule at one of its plants in the Bang Pa-in district. This facility had been flooded since October.
Other Western Digital facilities in Bang Pa-in and Navanakorn, which were also damaged, are still being worked on at the moment and may not reopen until March of next year or later.
The Thailand floods, which began in July, have had a major impact on the storage market, with many of the major hard drive makers operating from the country. Supply plummeted, sending prices through the roof, with many hard drives doubling in price.
The timing of Western Digital's renewed production is important, as many people will want to buy new hard drives over the Christmas shopping season. The company revised its gross margin forecast for its fiscal second quarter, which includes the month of December, up from 18 percent to 23 percent, with an expected revenue of $1.8 billion.
“The passion, perseverance, ingenuity and execution exhibited by the WD team has been extraordinary and enabled us to make substantial progress in partially restoring our operations in Thailand, well in advance of our earliest expectations when the floods hit,” said John Coyne, president and CEO of Western Digital. “Much work remains to be done but we couldn't be more pleased with the effort and results thus far, including tremendous support from our supply partners and strategic customers.”
Western Digital's early return to operation could even give it an edge over rivals like Seagate, which are still experiencing significant supply issues due to the flooding.
At the time of writing Western Digital's shares were up 8.38 percent to $31.70.
Source: Press Release