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Coronavirus Spread in South East Asia Directly Hits Storage Device Companies

In HDDs and components

Large jumps in detected coronavirus infections have sparked dramatic movements by governments around the globe to stem the speed of the infection rates to relieve the potential run on medical services. This week, much of the San Francisco bay area, home to Silicon Valley and the industry’s largest tech giants, mandated shelter-in-place orders, forcing everyone not in essential businesses to stay home. Widespread school closures and panic buying of goods ensued over the past week as a partial result of the uncertainties surrounding the potential trajectory of further restrictions imposed over the next few weeks.

In Southeast Asia, both Malaysia and the Philippines also imposed strict limitations on business operations as a result of spiking infection rates. Home to much of the HDD and, to a lesser extent, SSD supply chain, the past two days have seen companies scrambling to deal with the impact on the availability of personnel and other critical items, resulting in a slowing and, in some cases, an outright shut down of production. While the situation remains fluid and will likely change drastically even as this report is posted, here is what we know so far:

  • Some aluminum finished substrate manufacturing has been halted. All companies in the region are scrambling to get governmental approval to operate factories, either first on a skeleton crew basis, or allowing enough employees on an as-needed basis to show up to factories to continue production. Some companies have continued to operate over the past two days while others have shuttered factories until March 19 or later.
  • Media manufacturing in Malaysia continues at some suppliers while the availability of Malaysian-based employees needing to travel each day to Singaporean-based media companies appears to be constrained for now and may take several more days for the situation to clarify itself. As a result of the reduced workforce, output may slow.
  • HDD manufacturing in the Philippines has ceased for at least the next three days.
  • Suppliers of materials to these operations are also chasing down more information to clarify the impact of component manufacturing slow-downs or temporary shutdowns.

Governmental orders restricting human movement around the globe have been issued quickly, resulting in at least as many questions as answers in each case. What has been clear thus far is that with these orders it takes several days for people to understand the actual case-by-case limitations and for companies to either file for permission to operate or to receive governmental exemptions.

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