Western Digital granted permission to expand HDD production facility in Thailand

The Board of Investment (BOI) of the Kingdom of Thailand has approved Western Digital's plan to expand its hard disk drive production facility in the country. If Western Digital proceeds with this plan, this will be the first significant expansion of its HDD production capacity in years.

In total, Western Digital plans to invest ฿23 billion ($689 million) in the expansion of its 'HDD production and related equipment operations' in Bang Pa-In Industrial Estate, Ayutthaya Province, and 304 Industrial Park in Prachinburi Province, as noted by The Register. Western Digital has been operating in Thailand since 1997, employing over 28,000 people. The expansion will create over 10,000 jobs for Thai personnel and benefit related businesses by utilizing domestic raw materials such as electronic circuit boards (PCBA), metal and plastic parts, and PSUs.

The formal approval of the BOI does not necessarily mean that Western Digital will proceed with the plan and expand its HDD production facilities in Thailand. Western Digital has not made any announcements on the matter, either through a press release or filing with the U.S. Securities and Exchange Commission.

Unit sales of hard drives have been declining for about a decade as client PCs adopted solid-state drives. In contrast, operators of cloud data centers prefer to get the highest-capacity hard drives to install multiple low or mid-range HDDs. To that end, both Seagate and Western Digital have been closing down excessive hard drive production capacities. However, demand for high-capacity hard drives has increased in recent years due to demand from traditional cloud data centers and emerging AI data centers.

"This expansion is aimed at supporting the increasing demand for efficient data storage and processing systems driven by the growth of cloud technology and data centers," a press release by Thailand's BOI reads. "Thailand remains a leading global hard disk production base."

Indeed, as both Seagate and Western Digital assemble their HDDs in Thailand, the country accounts for 80% of the global hard drive production.

It should be noted that Western Digital is splitting the company into a maker of HDDs and a producer of NAND flash and SSDs. Before the company is divided, it is unlikely that Western Digital will make significant investments in production capacities. We cannot exclude this possibility as the HDD company must be positioned for growth.