Western Digital Shutting Down Hard Drive Factory

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With the SSD and NAND flash memory markets booming, Western Digital has made the tough decision to shut down its HDD (hard disk drive) manufacturing factory in Petaling Jaya, Malaysia by the end of 2019.

Western Digital first opened up shop in Malaysia in 1973. Its 1,000,000 square-foot Petaling Jaya factory commenced operations manufacturing custom semiconductors, but gradually transitioned to producing consumer and enterprise hard drives. Western Digital would then later expand the Petaling Jaya factory with its own $1.2 billlion dollar R&D facility. However, Western Digital has been in a slump the last couple of years.

HGST Technologies Malaysia, one of Western Digital's subsidiaries, closed the doors on its Bayan Lepas factory about two years ago. Once the Petaling Jaya factory goes out of commission, Western Digital will have no other choice but to spread out hard drive production between its remaining factories. Luckily, the major hard drive manufacturer still owns a 1.7 million square-foot facility in Bang Pa-In, Thailand and a 730,000 square-foot production facility in Prachinburi, Thailand. 

However, the closure of Western Digital's Petaling Jaya factory doesn't mean that the American hard-drive manufacturer is giving up on Malaysia. The company has hard drive substrate manufacturing facilities in Johor and Kuching. Western Digital's SSD assembly and test facilities, media manufacturing lines and R&D offices are also situated in Penang. According to a Western Digital spokesperson, the hard drive maker has plans to expand its SSD production capacity. The company is on the verge of opening its second SSD facility at Penang. It expects the facility to start production in the coming months.

Let's not forget that Western Digital forged a strategic joint venture with Toshiba in 2017. So, the hard drive expert already has an arsenal of SSDs at its disposal and it will continue to supply them to markets where there is a decline in demand for conventional hard drives.

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Zhiye Liu
Zhiye Liu
News Editor and Memory Reviewer

Zhiye Liu is a news editor and memory reviewer at Tom’s Hardware. Although he loves everything that’s hardware, he has a soft spot for CPUs, GPUs, and RAM.

8 Comments Comment from the forums
  • elbert
    Head scratchier given drive capacity haven't seen a reasonable drop since 2012. The 4TB capacity is 8 years old and by all past data the drive would no longer even be sold. Yet 4TB is priced over $100. I would like to have 12TB of capacity in 2~3 drives but no way will I pay that much. With all the videophiles out there and SSD's capacity just comes up short. I think WD is closing drive manufacturing plant to keep prices high.
    Reply
  • USAFRet
    21150781 said:
    Head scratchier given drive capacity haven't seen a reasonable drop since 2012. The 4TB capacity is 8 years old and by all past data the drive would no longer even be sold. Yet 4TB is priced over $100. I would like to have 12TB of capacity in 2~3 drives but no way will I pay that much. With all the videophiles out there and SSD's capacity just comes up short. I think WD is closing drive manufacturing plant to keep prices high.

    "Luckily, the major hard drive manufacturer still owns a 1.7 million square-foot facility in Bang Pa-In, Thailand and a 730,000 square-foot production facility in Prachinburi, Thailand. "

    "According to a Western Digital spokesperson, the hard drive maker has plans to expand its SSD production capacity. The company is on the verge of opening its second SSD facility at Penang."


    They're shutting down one of their HDD plants. Not all of them.
    Reply
  • Solandri
    21150781 said:
    I think WD is closing drive manufacturing plant to keep prices high.
    This is a common misunderstanding of how economics works. If there is sufficient demand, a company can make more money by producing more items to sell. The marginal cost for the extra production is less than for existing production (cost to produce the 2 millionth drive is less than the cost to produce the 1 millionth drive), so the profit margin on the extra drives is higher. The only reason a company (without a monopoly) will willingly reduce production is if there isn't sufficient demand.

    A company can only make more money by keeping prices higher than market price if it owns a monopoly. If there is no monopoly and a company keeps prices high, buyers will simply buy a competitor's product instead, and the company will put itself out of business.

    The HDD industry in particular had some of the slimmest profit margins for decades (like 1%-2% vs about 5% for the computer industry as a whole). That's what led to the rapid consolidation of manufacturers in the 1990s and 2000s, and led some big name players like IBM to exit the business.
    Reply
  • kenjitamura
    21150781 said:
    Head scratchier given drive capacity haven't seen a reasonable drop since 2012. The 4TB capacity is 8 years old and by all past data the drive would no longer even be sold. Yet 4TB is priced over $100. I would like to have 12TB of capacity in 2~3 drives but no way will I pay that much. With all the videophiles out there and SSD's capacity just comes up short. I think WD is closing drive manufacturing plant to keep prices high.

    Hard drives will start to see significant decreases in cost and increases in size a little past 2020; funny enough Western Digital are to thank for that. Western Digital Stuns Storage Industry with MAMR Breakthrough for Next-Gen HDDs
    They've created a process to increase storage density significantly by using microwave technology apparently. It builds mostly on existing drive technology so there won't be too massive of tooling costs associated with it. They're projecting 40 TB drives by 2025 and say it will keep climbing from there.


    Reply
  • AgentLozen
    I wanted to reply with something along the lines of what Kenjitamura said. I think that the technology used to produce mechanical hard drives has hit its limit which is why we're seeing the industry stall out.
    However, there are new production methods on the horizon that promise to break through the ceiling we've reached. (Such as MAMR, there's supposed to be a HAMR too if I recall correctly).
    Reply
  • justsomeprivacyguy
    So what does this mean for the NAS market if WD is going to begin phasing out producing HDD's? A 4TB SSD costs like $1000 whereas a WD Red is about $200. With WD/Sandisk leaving that basically just leaves us with...Seagate? /sigh
    Reply
  • techy1966
    I am going to go out on a limb here and say this has a lot to do with supply and demand. If they cut a factory of coarse supply will go down but if demand stays high then the prices will rise as well because lets face it standard hard drive prices are pretty good for the consumer and that is not something any company likes because they do not make as much money form their product. So instead of having a 75%-100% market they will shoot for 150%-200% market and put the prices more in line with SSD drives. This is millennial business 101 practice
    Reply
  • stdragon
    21152666 said:
    So what does this mean for the NAS market if WD is going to begin phasing out producing HDD's? A 4TB SSD costs like $1000 whereas a WD Red is about $200. With WD/Sandisk leaving that basically just leaves us with...Seagate? /sigh

    I got a bad batch of WD Red Pro's that's been dropping randomly out of an array, but I digress. There's still plenty of NAS capable HDDs out there (Seagate Ironwolf). But essentially, any HDD will function just fine in a NAS so long as it supports TLER / CCTL (forms of error recovery control)
    Reply