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Thailand Floods Hit the Supply Chain

Six months after the triple tragedy in Japan, Thailand has now been crippled with massive flooding that has killed 373 people, left hundreds of thousands homeless, and even more unable to work in the industrial parks. Many of these industrial parks are home to high-tech production facilities for major electronics manufacturers.

Here is a synopsis of the current situation. If you are aware of any specific product families that have longer lead times due to this situation, we encourage you to reply to this blog and share the information with the EBN community:

  • {complink 8043|Avago Technologies Pte.} has multiple manufacturing sites in Thailand; the Ayudhaya facility has been shut down for several days due to the floods.
  • {complink 12152|Benchmark Electronics Inc.} announced that the suspension of operations in Ayudhaya has been extended. Analysts expect a significant impact on its operations for the fourth quarter.
  • {complink 1989|Fairchild Semiconductor International} is reported to have some relationships with assembly/test subcontractors in Thailand. The impact any supply chain partner disruption might have on Fairchild, if any, is unknown at this time.
  • Hana Semiconductor, located in the Navanakorn industrial estate was affected, and estimates run as high as several months to get back to full production.
  • {complink 3277|Marvell Technology Group Ltd.} was not directly affected, but Marvel's stock price has fallen recently due in part to the use of its chips by Western Digital Corp. in its disk drive production facilities in Thailand.
  • {complink 3413|Microchip Technology Inc.} has issued a quarterly warning to investors, while noting that its two facilities in Thailand have not been affected by the severe flooding in the country.
  • {complink 3424|Microsemi Corp.} announced it suspended operations at one of its subcontracted facilities in the Rojana Industrial Park. Analysts expect delivery delays and an impact on the current quarter's revenues.
  • {complink 3638|NEC Corp.}/Tokin may have had its plant equipment affected by the flooding; at this time there are no estimates on when the plant will resume operations. Supply shortages have already hit many end-customers.
  • {complink 9538|NXP Semiconductors N.V.} has an assembly and test production facility in the Bangkok area; however at this time, the flood has had no direct impact on its facilities.
  • {complink 3993|ON Semiconductor Corp.}'s Sanyo Semiconductor operations are located at the Rojana Industrial Park. Production at this facility is suspended for an indefinite period. Some products will be produced at alternative locations, but delays and longer lead-times are to be expected.
  • ROHM Semiconductors' factory in Navanakorn halted production for nearly a week, and it is reported that the first floor of the facility is almost entirely submerged.
  • Sanyo Semiconductor, located in the industrial part in Ayudhaya has temporarily stopped operations to assess the situation.
  • {complink 4842|Seagate Technology LLC}’s factories in Thailand are operational, yet Seagate has warned of product delivery delays because of flooding.
  • Shortages may be expected in the supply of {complink 5703|Texas Instruments Inc.} products as some of its material suppliers, like Hana Semiconductor, were directly affected by the flood.
  • {complink 5648|Toshiba Corp.}'s semiconductor and storage device division factories in Bangkadi Industrial Park and in Navanakorn Industrial Estate Zone were temporarily closed pending additional investigation.
  • {complink 6308|Western Digital Corp. (WD)} announced that it has extended the suspension of its operations in Thailand. Financial analysts are not expecting manufacturing to be back at full capacity until the first quarter of next year.

9 comments on “Thailand Floods Hit the Supply Chain

  1. prabhakar_deosthali
    October 31, 2011

    For the last month or so there has been only sparse news about these Thai floods. The real situation and its aftereffects are now unfolding and the situation looks to be as grim as what happened in Japan earlier.

     

    Year 2011 seems to be the year of disruptions for the supply chain and many a lessons will be learnt when the industry finally comes out of this situation.

  2. Backorder
    October 31, 2011
    The floods in thailand have really been shockingly devastating. I feel for the new government and the fledgling leader – Yingluck Shinawatra, the new prime minister. The damage to the economy was estimated as high as 150 B Baht (USD 4.8 B) even about a couple weeks back.

  3. Ms. Daisy
    October 31, 2011

    Yeah, 2011 has been a tough year all around. The flloods in Thailand is just another punch. The supply chain seems to be adjusting to each catastrophe very well and hopeful will ride this one too. I am just wandering how much more it can take before a cascading fall starts. 

  4. FLYINGSCOT
    October 31, 2011

    Thanks for the detailed list.  I reckon it will be a while before the full business impact is understood.  I am just back from Asia and it was shocking weather over there.  I hope not too many people were hurt.

  5. Anne
    October 31, 2011

    The Thailand Floods is highly disasterous and this will definitely have a significant impact on computer manufacturers and production as the major suplies of hard drive are seriously hit.  Assuming company like Western Digital, Seagate and Toshiba have their production sites elsewhere, the effect in the  supply chain would have been at minima, they suppose to have crisis contigency plan in place.

  6. electronics862
    October 31, 2011

    Sorry for one more natural disaster. Japan is still trying to come out of the impact again floods devastated Thai people. Thailand is having firms from many electronic industries which were shutdown for the last few weeks. Wish Thai to recover as soon as possible and be onto track with in few weeks.

  7. Daniel
    November 1, 2011

    Yes Daren, natural disaster hits Southeast Asian countries once again. Most of the electronics production and assembling companies are largely depends on Thailand companies, either for products or components. I read that most of the electronic assembling companies are going to be hit badly due to the flood in Thailand. This may again had a bad impact in availability and intern pricing factor too.

  8. jbond
    November 1, 2011

    This is a horrible thing for the country of Thailand and its people. They were just starting to really get some growth in the electronics industry. Of course this growth has come to a complete halt while the country does battle with Mother Nature. It will be interesting to see how long it takes Thailand to emerge from this disaster, since they don't have the finances like Japan. After seeing Japan devastated earlier this year and now Thailand, this should cause some executives to consider diversification for manufacturing plants. With so much focus in certain regions, we are all susceptible to disaster.

  9. Ariella
    November 1, 2011

    On top of the damage done to industry, there was a huge loss of human life and property. This really was a catastrophe. 

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