Samsung closes hard-disk-motor plant in Korat, lays off 1,400

[bim]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

Everyone? Really? Can you back up this statement with facts please.

[Anthony5]

Samsung HDD devision was merged/taken over by Seagate , about 2 years ago ! No wonder HDD deteriorated , Seagate is not known for reliable drives. So this closure has nothing to do with the Thai government or world economy or relocating because of labour costs. Seagate is just cutting some fat away. HDD market is losing somewhat to the SSD's.

Exactly.

Technology advances have made them redundant.

SSD will replace HDD entirely when prices drop.

And SSD's grow on a tree, where HDD's are produced in a factory?

[spidermike007]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

I suspect this is closer to the truth. It appears to me (I am no expert in this area) that Thailand does not do enough to assist foreign businesses and keep them engaged and happy. Malaysia offers tax benefits, visa incentives, property ownership incentives, etc. Indonesia offers incentives. Vietnam appears to be offering incentives. As usual, Thailand lags far behind the curve, when it comes to progressive, creative, ingenious, and proactive thinking, and long term planning. The junta is no different in this regard.

I am certain the world economy is a factor too. And I wonder how prepared Thailand is for the impact this may have, in the long run. Lastly, the implementation of the 7th ASEAN charter, which is set to go into effect new years eve, of this year, may have even more impact The neighbors are picking up the ball, and running with it. Is Thailand preparing for the changes ahead? Is Thailand prepared to adhere to the provisions of the charter, such as a free flow of alcoholic beverages across all ASEAN state lines, duty free? They ignored that provision, which was within the 6th charter. Somehow, they got away with it. This time they run the risk of becoming a pariah state, within ASEAN.

[Baerboxer]

In more likelihood according to DJJaime the NCPO are doing such a fantastic job economy wise that Samsung would simply not be able to compete with the competitors falling over themselves to get into the Thai market.....

Nothing to do with that. Samsung have announced that they are getting out of this particular business. They are not closing and re-opening somewhere else.

Sorry it doesn't suit your political agenda.

[Baerboxer]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

I suspect this is closer to the truth. It appears to me (I am no expert in this area) that Thailand does not do enough to assist foreign businesses and keep them engaged and happy. Malaysia offers tax benefits, visa incentives, property ownership incentives, etc. Indonesia offers incentives. Vietnam appears to be offering incentives. As usual, Thailand lags far behind the curve, when it comes to progressive, creative, ingenious, and proactive thinking, and long term planning. The junta is no different in this regard.

I am certain the world economy is a factor too. And I wonder how prepared Thailand is for the impact this may have, in the long run. Lastly, the implementation of the 7th ASEAN charter, which is set to go into effect new years eve, of this year, may have even more impact The neighbors are picking up the ball, and running with it. Is Thailand preparing for the changes ahead? Is Thailand prepared to adhere to the provisions of the charter, such as a free flow of alcoholic beverages across all ASEAN state lines, duty free? They ignored that provision, which was within the 6th charter. Somehow, they got away with it. This time they run the risk of becoming a pariah state, within ASEAN.

Nothing to do with the current government in this instance, or the competitiveness of Thailand. All to do with disruptive innovation on these particular products.

Samsung have announced they are getting out of this business - not moving somewhere else.

Thailand isn't, by far, the most welcoming of the SEA countries. But, all those that have factories here choose to do so for their own reasons, putting up with the bureaucracy, corruption, xenophobic regulations, lack of language and other skills. Why - you'd have to ask them that question.

There was more concern following the massive 2011 flooding and total government farce at managing it; then at the pre-coup violence than after coup. Whilst foreign governments make noises about returning to democracy businesses don't. They couldn't care less as long as their is stability and the economics are right. Ask VW.

Thailand does need to address many things, and quickly, or others will overtake it. Whether this or subsequent governments are capable, and have the desire and balls to do that, remains to be seen.

The idea that if you have less customers, simply put your prices up, won't work. Neither will the continuance of protected home markets, contrived monopolies, and the forced Thai shareholders and majority ownership. These conveniences won't last for ever, and unless someone is working on them already, they're too late.

[rametindallas]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

The Junta is doing such a terrible job with the economy /sarc

BANGKOK, July 17 Despite the pall hanging over the Thai economy, office occupancy rates in Bangkok have surged to a record, and they are likely to see more upside due to a stubborn lack of new supply and keen interest from foreign firms to set up shop in one of the cheapest cities in Southeast Asia. http://www.reuters.com/article/2015/07/17/bangkok-offices-idUSL4N0ZW36B20150717

[Baerboxer]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

I do not think business closures have anything to do with military overthrow, this was not the first one.

Vietnam offers better business and tax incentives plus reliable hard working labor at cheaper prices.

Pure economics.

There is less demand for products, costs must be reduced.

Moving elsewhere, works out cheaper than staying, plus tax breaks saving few more hundred million over the years

Economics includes considering the stability of the host country. Saying this never-ending coup, the following civil unrest and the muzzling of the media doesn't enter into the equation is naïve.

Ever heard of PESTLE factors? Those factors will all be considered. P is for political. L is for legal. Of course all the factors are taken into the equation.

He isn't saying they're not. He's saying that economics is also an important factor. (E is for economics, second E for environment).

In this instance the driving factor is T = technology. Disruptive innovation in the form of replacement different technology makes these products a less attractive market for Samsung to be in. So they've decided to pull out of that business.

Perhaps you could ask VW what weighting they gave in their assessment for a new large plant to be located in Thailand to stability.

[Thai at Heart]

Samsung HDD devision was merged/taken over by Seagate , about 2 years ago ! No wonder HDD deteriorated , Seagate is not known for reliable drives. So this closure has nothing to do with the Thai government or world economy or relocating because of labour costs. Seagate is just cutting some fat away. HDD market is losing somewhat to the SSD's.

Exactly.

Technology advances have made them redundant.

SSD will replace HDD entirely when prices drop.

A friend of mine moved out of s company that supplied all the plastic packaging used for a clean room for drives about 3 years ago. A large Hitachi disc plant closed about 3 years ago in rayong. Times change and move on. Disc drives are no more.

Thailand however steadfastly refuses to move with the times.

[elgordo38]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

Yes your statement is correct to a point but the upcoming signing of the TPP (which Obama will push through as part of his legacy) is the main reason. Vietnam is one of the signatories to this pact and will also be its main beneficiary much the same as Burma is under its new "open for business" policy. The business vultures flock to these places in droves attracted by cheap labor poor labor/pollution laws. Although wages in Thailand are cheaper by Western standards VN wages and labor laws are lower than Thailand and Samsung operating out of VN will get more favorable treatment when exporting into the USA. Thailand unfortunately is not part of this pact.

[Thai at Heart]

1,400 people in relatively high paying positions really means some 5,000 to 8,000 people, ( families) and

businesses, ( groceries/barbers/vendors ), are now in a terrible financial bind. No money to go elsewhere and little hope of local

employment.

The multiplier effect of a large factory like this is much more. Hence why FDI brings so much quick growth.

Of course Thailand hasn't had increasing FDI for 5 years now. But hey, many think Thailand doesn't need foreigners.

[spidermike007]

1,400 people in relatively high paying positions really means some 5,000 to 8,000 people, ( families) and

businesses, ( groceries/barbers/vendors ), are now in a terrible financial bind. No money to go elsewhere and little hope of local

employment.

The multiplier effect of a large factory like this is much more. Hence why FDI brings so much quick growth.

Of course Thailand hasn't had increasing FDI for 5 years now. But hey, many think Thailand doesn't need foreigners.

There is an arrogance on the part of the government that is quite exceptional and disturbing. It does appear as if they do not feel they need any sort of outside help. Surely they must know where the Thai economy would be without Japanese manufacturers. Don't they? I realize they are not super bright, but could they be that dim? Or, is it just plain arrogance and silly nationalism?

[Thai at Heart]

1,400 people in relatively high paying positions really means some 5,000 to 8,000 people, ( families) and

businesses, ( groceries/barbers/vendors ), are now in a terrible financial bind. No money to go elsewhere and little hope of local

employment.

The multiplier effect of a large factory like this is much more. Hence why FDI brings so much quick growth.

Of course Thailand hasn't had increasing FDI for 5 years now. But hey, many think Thailand doesn't need foreigners.

There is an arrogance on the part of the government that is quite exceptional and disturbing. It does appear as if they do not feel they need any sort of outside help. Surely they must know where the Thai economy would be without Japanese manufacturers. Don't they? I realize they are not super bright, but could they be that dim? Or, is it just plain arrogance and silly nationalism?

I don't know. But no one seems to be freaking out about possibly starting to lose FDI. FDI is the engine of growth for Thai business.

Thailand is barely out of 3 rd world status, and it is already losing some FDI . this is a biiig problem since the country hasn't developed enough and moved out of agriculture, but already has an ageing population.

[BoristheBlade]

The global downturn has certainly impacted Thailand and this is another blow for its citizens.

The Junta have done a wonderful job in guiding the economy through it, but unfortunately it cannot shield the country from outside market forces.

Lets hope the economy rebounds soon.

The Junta have done a wonderful job in guiding the economy through it, but unfortunately it cannot shield the country from outside market forces. .....Please explain!

[DrTuner]

SSD's are already here. Old HD's belong in the museum and with them, the production plants. No manual work needed when bonding memory chips to PCB's.

So long and thanks for all the fish, Thailand.

[MaeJoMTB]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

due to fears of civil unrest

Care to offer a link/proof to back up your, very obvious, propaganda?

Censorship laws prohibit me from being any more explicit.

If you don't know, I can't tell you.

[bheard]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

Nothing much to do with your idea either. Technology changes and there is not the demand for disc drives there once was.

It's solid state now! Didn't you notice?

[torpedo1970]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

This has nothing to do with global down turn or civil unrest.

This is the second Samsung closure in Thailand i believe. Tv's are getting moved to the new factory in Vietnam due to cost efficiency.

It does not matter what the governments propaganda is saying, The cost of running a factory in Thailand has hugely increased, and then there is the 20% increase of minimum wage discussion too.

This get the big companies scared and running to a more cost efficient country.

It is just a natural progression, since the cost of living have gone up (at least 50%) regardless of what the propaganda is trying to say.

Lets see how this will effect the cost of Samsung TV's in Thailand. is it going to be a highly taxed product that will only be available for the High-so.

Then the Chinese will bring in one cheap product for the masses, with tax reductions off course??

[casualbiker]

The global downturn has certainly impacted Thailand and this is another blow for its citizens.

The Junta have done a wonderful job in guiding the economy through it, but unfortunately it cannot shield the country from outside market forces.

Lets hope the economy rebounds soon.

Could you give an example how the junta guided the economy through the global downturn.

Just ONE is enough to satisfy me.

They weren't in power in 2008!

And according to the Economist there isn't currently a global downturn/recession but there may be by the end of 2015.

http://www.economist.com/news/leaders/21654053-it-only-matter-time-next-recession-strikes-rich-world-not-ready-watch

[konying]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

I do not think business closures have anything to do with military overthrow, this was not the first one.

Vietnam offers better business and tax incentives plus reliable hard working labor at cheaper prices.

Pure economics.

There is less demand for products, costs must be reduced.

Moving elsewhere, works out cheaper than staying, plus tax breaks saving few more hundred million over the years

Economics includes considering the stability of the host country. Saying this never-ending coup, the following civil unrest and the muzzling of the media doesn't enter into the equation is naïve.

Thailand has a very long history of coups. What is naive is to think company entered the market without any research.

Coups and media muzzling has very little to do with business operations.

I have lived through 3 coups in Thailand and was not affected in any way what so ever in my daily life or business operations

[atyclb]

SSD's are already here. Old HD's belong in the museum and with them, the production plants. No manual work needed when bonding memory chips to PCB's.

So long and thanks for all the fish, Thailand.

HD's are far from being in museums. they still are quite useful. perhaps when ssd prices fall to HD levels HD's will lose importance.

HD's are great in various RAID profiles and still are adequate as boot drives. there are hybrid HD-ssd that are quite decent.

purists argue sata ssd's are made obsolete by pcie ssd's

[Baerboxer]

SSD's are already here. Old HD's belong in the museum and with them, the production plants. No manual work needed when bonding memory chips to PCB's.

So long and thanks for all the fish, Thailand.

HD's are far from being in museums. they still are quite useful. perhaps when ssd prices fall to HD levels HD's will lose importance.

HD's are great in various RAID profiles and still are adequate as boot drives. there are hybrid HD-ssd that are quite decent.

purists argue sata ssd's are made obsolete by pcie ssd's

The CEO of Samsung doesn't share your enthusiasm - that's why he's getting out of that product.

[Baerboxer]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

This has nothing to do with global down turn or civil unrest.

This is the second Samsung closure in Thailand i believe. Tv's are getting moved to the new factory in Vietnam due to cost efficiency.

It does not matter what the governments propaganda is saying, The cost of running a factory in Thailand has hugely increased, and then there is the 20% increase of minimum wage discussion too.

This get the big companies scared and running to a more cost efficient country.

It is just a natural progression, since the cost of living have gone up (at least 50%) regardless of what the propaganda is trying to say.

Lets see how this will effect the cost of Samsung TV's in Thailand. is it going to be a highly taxed product that will only be available for the High-so.

Then the Chinese will bring in one cheap product for the masses, with tax reductions off course??

Correct - it has to do with Samsung exiting business in that product and acting accordingly. Not moving production.

My cost of living hasn't increased 50%, no where near. Although some prices have increased, just as they did when Yinglcuk kept lying and insisting it was all in the imagination.

VW must be missing you economic and strategic perception - perhaps you should offer them your advice before they build their planned huge production facility here?

[fang37]

Government subsidies is merely a bandaid. OK in the short-term - that is all. Australia is a prime example of this in the car industry. Now, the car industry in Oz is non-existent.

If you subsidize, in effect, someone else is being taxed for the privilege.

In fact, it merely reallocates in an arbitrary way.

Prime goal of government is to stay in government.

At least, the above is what was taught to me at university.

Edited July 18, 2015 by fang37

[Mrjlh]

Did you see where Samsung is investing $3 Bilion into Vietnam for "cell phones" and a big whopping bet of $14 Billion in S. Korea to build a plant to develope Smart Phones with Intel? Tells me they are slowly getting out of the SSD/HDD business even though they have one of the best on the market. Add to the fact that sales for both desktop and laptop computers are waydown due to IPads and Smart phones flooding the market, it's no suprise what is happening. Just business.

[Thai at Heart]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

This has nothing to do with global down turn or civil unrest.

This is the second Samsung closure in Thailand i believe. Tv's are getting moved to the new factory in Vietnam due to cost efficiency.

It does not matter what the governments propaganda is saying, The cost of running a factory in Thailand has hugely increased, and then there is the 20% increase of minimum wage discussion too.

This get the big companies scared and running to a more cost efficient country.

It is just a natural progression, since the cost of living have gone up (at least 50%) regardless of what the propaganda is trying to say.

Lets see how this will effect the cost of Samsung TV's in Thailand. is it going to be a highly taxed product that will only be available for the High-so.

Then the Chinese will bring in one cheap product for the masses, with tax reductions off course??

Correct - it has to do with Samsung exiting business in that product and acting accordingly. Not moving production.

My cost of living hasn't increased 50%, no where near. Although some prices have increased, just as they did when Yinglcuk kept lying and insisting it was all in the imagination.

VW must be missing you economic and strategic perception - perhaps you should offer them your advice before they build their planned huge production facility here?

Well, one could estimate that because Thailand was first to receive this FDI, it maybe the first to see factories closing because these pieces of technology may become obsolete first.

It is a little unusual that they open an ssd factory in Vietnam and the close in Thailand. Why didn't they build the sad factory in Thailand. Many reasons, but fact is they didn't.

[mojorison]

The global downturn has certainly impacted Thailand and this is another blow for its citizens.

The Junta have done a wonderful job in guiding the economy through it, but unfortunately it cannot shield the country from outside market forces.

Lets hope the economy rebounds soon.

Homegrown or imported gear?

[pmugghc]

HDD market outlook: relatively flat on a unit basis 2014-2018:

https://m.idc.com//research/248130

[mommysboy]

If they wanted to they might have refitted the factory, rather than invest in Vietnam. So not quite as monochrone as it seems.

[billd766]

Samsung HDD devision was merged/taken over by Seagate , about 2 years ago ! No wonder HDD deteriorated , Seagate is not known for reliable drives. So this closure has nothing to do with the Thai government or world economy or relocating because of labour costs. Seagate is just cutting some fat away. HDD market is losing somewhat to the SSD's.

Exactly.

Technology advances have made them redundant.

SSD will replace HDD entirely when prices drop.

A friend of mine moved out of s company that supplied all the plastic packaging used for a clean room for drives about 3 years ago. A large Hitachi disc plant closed about 3 years ago in rayong. Times change and move on. Disc drives are no more.

Thailand however steadfastly refuses to move with the times.

So you are saying that Samsung which is a Korean company and is no longer in the business of motor driven hard drives are closing down and it is the fault of THIS government and country for not moving with the times.

Now I would have thought that the company who actually manufactures those hard drives which are no longer used made that business decision and NOT Thailand which is merely where they were built and very profitably for a few years.

Samsungs business decision NOT to retool and produce SSDs would have been because they are getting out of that side of the business and for NO other reason and nothing to do with Thailand.

[billd766]

Samsung (and everyone else) are leaving (to start new plants in Vietnam) due to fears of civil unrest following the military overthrow of democracy.

Nothing to do with global economic downturn.

This has nothing to do with global down turn or civil unrest.

This is the second Samsung closure in Thailand i believe. Tv's are getting moved to the new factory in Vietnam due to cost efficiency.

It does not matter what the governments propaganda is saying, The cost of running a factory in Thailand has hugely increased, and then there is the 20% increase of minimum wage discussion too.

This get the big companies scared and running to a more cost efficient country.

It is just a natural progression, since the cost of living have gone up (at least 50%) regardless of what the propaganda is trying to say.

Lets see how this will effect the cost of Samsung TV's in Thailand. is it going to be a highly taxed product that will only be available for the High-so.

Then the Chinese will bring in one cheap product for the masses, with tax reductions off course??

Correct - it has to do with Samsung exiting business in that product and acting accordingly. Not moving production.

My cost of living hasn't increased 50%, no where near. Although some prices have increased, just as they did when Yinglcuk kept lying and insisting it was all in the imagination.

VW must be missing you economic and strategic perception - perhaps you should offer them your advice before they build their planned huge production facility here?

Well, one could estimate that because Thailand was first to receive this FDI, it maybe the first to see factories closing because these pieces of technology may become obsolete first.

It is a little unusual that they open an ssd factory in Vietnam and the close in Thailand. Why didn't they build the sad factory in Thailand. Many reasons, but fact is they didn't.

Which company is opening a SSD factory in Vietnam?

It certainly isn't Samsung. They are getting out of the disk drive completely.