Seagate moves into overdrive

PUBLISHED : Tuesday, 16 May, 1995, 12:00am
UPDATED : Tuesday, 16 May, 1995, 12:00am

SEAGATE Technology has taken the first step in an ambitious plan to corner the big-demand Asia-Pacific disk drive market by starting work on a multi-million dollar production facility in Singapore.

One of the leading disk manufacturing companies in Asia, Seagate's one-million-square-foot S$200 million (about HK$1.09 billion) production plant, Seagate City, will add to the region's significant production capacity when it comes on line in July, 1996.

At a ceremony to announce the project, Seagate president and CEO Al Shugart and Singapore's Economic Development Board chairman Philip Yeo said the plant would not only mark a milestone for Seagate and Singapore but also advance the whole IT industry and cultivate strong mainland contacts.

'The ability to do business in technology centres with the skill and foresight to design and build tomorrow's products is the reason we have invested US$1.4 billion in Asia over the past 12 years,' Mr Shugart said.

'In an industry as dynamic as ours, I believe we must stay focused and never lose sight of our core strengths, while maintaining a finger on the pulse of the international IT industry.' Seagate's venture is one of a series of investments by leading technology firms that have put Singapore and the rest of Southeast Asia at the centre of the world's information technology industry.

In the manufacturing of disk drives, Seagate has always given priority to capacity and price.

'Business decisions must be made immediately, otherwise opportunities for growth and expansion are lost,' Mr Shugart said. 'Product cycles are reduced from years to months in order to remain competitive in the market. In such a scenario, careful planning and strategic decision-making are crucial and the companies that flourish will be those that grasp and manage this pace of the IT industry.

'Our company has been experiencing unprecedented growth rates in the past few years. In the fiscal year 1994 we achieved net income of US$225 million on US$3.5 billion revenue. And in our last quarter we posted record revenues and we expect to continue on this growth path for the foreseeable future. Asia accounts for most of the worldwide production of disk drives.' Nearly 80 per cent of Seagate's total production output, for example, is shipped from Singapore, Malaysia, Thailand and late this year from its new US$30 million 50,000-sq-ft factory in China's Jiangsu province.

Mr Yeo said Seagate had contributed substantially to Singapore's data storage industry and the company's continued expansion firmly reinforced its role as a partner in progress.

'Today, Singapore accounts for nearly half of the world's unit output of rigid disk drives. Manufacturers in Singapore are now producing at a combined rate of some 60 disk drives every minute to meet the explosive demand for mass data storage,' Mr Yeo said.

'In 1994 alone our disk drive industry produced over 29 million units of the devices at an ex-factory revenue output of S$10.2 billion, contributing to over 20 per cent of the electronics industry's output. This sector is also the largest employer in the electronic industry,' he said.

Mr Yeo said the electronics industry would continue to play a pivotal role in Singapore's economy as the country was committed to companies like Seagate.

Designed to increase operational efficiency, improve communication and provide significant cost improvements, the new Seagate plant will feature some of the industry's most advanced automated process technologies for the full line of Seagate's storage devices.