The clean-up begins
The Bangpa-In Industrial Park is the first of seven major parks where clean up has begun because it is also the first to complete pumping out all of the flood waters. This is the location of 90 facilities, among them are major HDD and component suppliers such as Western Digital and Nippon Super Precision (see this update from Bangkok Post). While the waters have been pumped out, it is estimated that the clean up will take roughly two to three months. Many companies must now determine what to do about equipment that was submerged in up to five-meters (approx. 16 feet) of water for roughly one month.
Hana Microelectronics' facilities located in the Hi-Tech Industrial Estate in Ayutthaya, which was under 2.3 meters (approx. 7.5 feet), is hoping to reach 25% production resumption by the end of 1Q12, but Hana is not expecting to be back to full-capacity at this site for two years, according to this recent interview with the Bangkok Post. While Hana shifted much of their production to other sites in- and outside of Thailand to continue supplying customers, business will be negatively impacted due to the flooding and it will take time for customers to feel comfortable with supplies from these facilities, hence the two-year window, according to the interview.
Limited availability hits
Along the semiconductor and electronics supply chains, there are many companies, from the small to the leaders, who are negatively affected by the massive supply chain disruption due to the terrible flooding disaster. While consumers have heard about the humanitarian and business disasters, now they are beginning to see it on their store shelves.
According to this report from FT, a Costco store in New Jersey has placed signs limiting customers to the purchase of two (2) hard disk drives (HDD) from Western Digital. In this report from Techie Insider, there are also single purchase limits being imposed on HDD purchases by other retailers, alongside of almost tripled prices for some drives.
But it is not the weary holiday shopper alone who is being confronted with HDD quotas and supply problems. Based on a round-up of earnings calls recently, the shortage visibility is improving and we are expecting to see constrained supply through 1H12, that is, until June-July 2012 (see here for HP's recent earnings call explaining impacts and related commentary here from Bloomberg).
While many are committing to restarting production in Thailand, there are lingering questions about expansion and upgrades until the Thai government can provide solid water management plans and then enact them (such as new and higher dykes, sluice gates, etc.), according to this in the Bangkok Post.
Thailand is certainly facing serious economic questions now as the immense job of reconstruction, funding, and continued economic production (GDP growth) must be tackled (see this discussion from Bloomberg). How the government handles the aftermath will be critical for companies deciding how they will spend their next CAPEX budgets.