Hitachi Global Storage Technologies, the hard disk drive venture between Hitachi Ltd and International Business Machines Corp, unveiled plans on Monday to build a US $500 million plant in China.
Hitachi Global Storage Technologies (HGST) is the world's second-largest hard disk drive maker by revenue after Seagate Technology HDD Holdings.
Located in the southern Chinese boomtown of Shenzhen, the new HGST plant will produce 10 million disk drives in its first year of production starting from the fourth quarter of 2005, its newly appointed president of Greater China, Dirk Thomas, told Reuters by telephone.
Ultimately, the facility will have the capacity to make more than 30 million disk drives, ranging from 3.5-inch to 2.5-inch, 1.8-inch and 1.0-inch drives, Thomas said.
The new facility, which will boost the firm's employee numbers to 11,500 from 4,500 now, is expected to help cut HGST's production costs by 15-20 percent initially, he said.
Hitachi Ltd, Japan's largest electronics conglomerate, has said it expected sixfold growth in its net profit to 100 billion yen ($921 million) in the year to March 2005, driven by a recovery in its hard disk drive operations.
Hitachi said it expected its hard disk unit to post an operating profit of 20 billion yen in the year to next March, a sharp turnaround from a 10.9 billion yen loss last year.
HGST produced 43 million disk drives last year and it is aiming to make 53 million disk drives in 2004.
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