Seagate shutting down it's largest HDD manufacture plant

[mudmanc4]

In recent years, the domestic electronics industry at the end of each year there will be a wave of business failures. Not long ago, there are a number of Companies in the industry declared bankruptcy, yesterday, the industry came news that Seagate Suzhou plant officially announced the dissolution.

 

Seagate Suzhou plant officially announced the dissolution

According to the announcement of the Seagate Suzhou plant, said, because of the continued optimization of operational efficiency considerations, according to the board of directors decided that Seagate had to make a decision to dissolve the factory in Suzhou, china. The employees will be affected, we regret the early dissolution of Suzhou factory is Seagate to continue to reduce the global adaptation of current and future market demand measures the scale of production, in order to better." In addition, Seagate also said that from January 11th to January 18th will apply for staff leave procedures, and in accordance with the People's Republic of China labor law to pay compensation to employees.

 

On the whole, in January 10, 2017, Seagate officially announced the dissolution of the Suzhou news.

According to statistics, Seagate Technology (Suzhou) Co., Ltd. was founded in June 2004, operating range of research, development, manufacturing, processing, all kinds of optical disk drive, drive and other parts, all kinds of computer software and storage system and its components, all kinds of computer peripheral products and parts, sales of the products and provide customer service and maintenance service and related technical and consulting services.

 

In fact, Seagate Suzhou factory today announced the collapse is not accidental. As early as in September 2015, Seagate Suzhou factory began to lay off. At the end of June 2016, Seagate once again announced global layoffs of 3%, or about 1600 people. The layoffs seem to be aimed at their factories in china.

 

December 2016 industry sources said the Seagate Suzhou plant is about to close, then also led to the Seagate factory employees gathered in Suzhou protest, is said to be required to compensate employees 2N+1+1. But from the Seagate factory in Suzhou notice, should be gone.

 

Another source said that after the closure of Seagate Suzhou plant, its enterprise class hard drive production line will be moved to Seagate Wuxi plant, other production lines will be closed directly.

 

According to Baidu encyclopedia update in October 2016, Seagate Suzhou factory employs about 3000 people. Before taking into account the network data lag and the Seagate factory in Suzhou, there have been some layoffs, and some employees may be with the enterprise hard line moved to Wuxi, with 1600 Seagate previously announced layoffs, layoffs this seems to be aimed at the Seagate factory in Suzhou. In other words, the dissolution of the Seagate Suzhou plant will lead to nearly 1600 unemployed.

 

Mechanical hard disk market downturn, overcapacity, layoffs

In recent years, although the PC market continues to decline, but the storage component PC SSD solid state drive is growing rapidly. From this table we see not hard, 2011-2015 years, SSD shipments from 1460 growth to 102 million, growth of nearly 700%; while shipments of HHD mechanical hard disk has continued to decline, from 621 million 500 thousand to 468 million 900 thousand, fell by 24%, fell to the lowest point in history.

 

HHD traditional mechanical hard disk drive, mainly by mechanical components, read and write data need to rely on physical rotation disk, waiting for the spindle motor, a magnetic head and a magnetic head arm to find the data in the disc position, the whole process is quite complicated, seriously restricts the performance of the whole PC. The SSD does not have any mechanical components, without the need for complex mechanical movement, relying on flash memory chip, can quickly and accurately access any position of the driver. At the same time SSD has excellent random access speed, excellent multi tasking capability and excellent durability and reliability. The only constraint on the development of SSD is the price and storage capacity.

 

But now the development of SSD technology, SSD's mainstream capacity has grown from 32GB to 128\/256GB, and now the maximum capacity of SSD and nearly 10TB, it is predicted that in 2018 the maximum capacity of SSD will be raised to 128TB. At the same time, SSD prices are falling all the way. Although the price of SSD like 1TB\/2TB is still very expensive, but the price of 128\/256GB SSD accepted by the general public, the capacity to meet the basic needs of the system disk or disk. You can see that in just a few years time, the mechanical hard disk has begun to face the situation is eliminated by SSD.

 

In the face of changes in the trend of the environment, as the world's two largest traditional HHD hard drive manufacturers - Western data and Seagate also suffered a dilemma. To this end, WD in 2015 announced the acquisition of one of the world's largest flash chip maker SanDisk for $19 billion to SSD, both arms, has become the second flash resources of traditional hard disk manufacturers will benefit storage products WD and HGST two brands of the west. Plus had flash resources of Toshiba, Seagate is not only in the four hard disk flash production resources. Although Seagate in 2014 to $450 million in cash to acquire Avago's LSI solutions (ASD) and flash memory component (FCD) assets, with the ability to provide a full range of storage solutions. Seagate's lack of flash production line, and other strategic resources lost three hard drive manufacturers competition, especially Seagate early shut down consumer SSD production line (Seagate 600 series SSD), SSD in the consumer field, Seagate's market share is almost negligible.

With the sharp decline in the HHD market demand, overcapacity Seagate also had to take layoffs, closing factories and other measures to ease the pressure.

 

January 2015, Seagate has announced 2950 layoffs worldwide, accounting for about 6% of the total number of employees. The same day, chief executive officer and chief operating officer of both class chairman Steve Luczo, CEO of back, and cut 25% salary. In September of the same year, Seagate announced that as part of the global workforce optimization measures, layoffs 1050 people, accounting for about 2% of the total number of employees. Less than a year later, the end of June 2016, Seagate will once again announced layoffs of 3%, or about 1600 people. This also led directly to the closure of Seagate Suzhou factory.

Seagate has announced its first quarter fiscal year 2017 earnings, in terms of mechanical hard disk shipments from the lowest point in the last quarter, but still not optimistic. As of the quarter of September 30, 2016, Seagate shipped hard disk 38 million 900 thousand, an increase of 6% over the previous quarter of 36 million 800 thousand, but still far less than the same period last year, 47 million 200 thousand.

 

If you continue to do so, Seagate will be more difficult. However, at present, China is actively promoting the domestic storage industry, if Seagate is willing to cooperate with domestic storage manufacturers, then, may be a new opportunity.

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