Western Digital Shutting Down Hard Drive Factory

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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  • 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.
  • USAFRet
    45049 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.
  • Solandri
    45049 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.