Hitachi shifts hard drives to China

The firm can better meet demand from Asian customers

Hard-disk drive maker Hitachi Global Storage Technologies (Hi- tachi GST) will build up production of its one- and 1.8-inch hard drives over the next few years to meet growing demand from the consumer electronics sector.

'Asia will be key for us in this expansion. We need to get ahead of this [demand] curve,' said Dirk Thomas, Hitachi GST's vice-president of business development and strategy.

He predicted that China, as the manufacturing base of many information technology and consumer electronics firms, would probably account for about 90 per cent of the company's hard-drive sales over the next few years from about 50 per cent now.

'Hitachi GST is aggressively investing in consumer electronics and emerging applications as the highest growth segment of its business,' he said.

Market research firm International Data Corp (IDC) estimates that worldwide hard drive shipments for consumer electronics will grow to more than 70 million units in 2007 from 20 million. These drives will be used in MP3 players, personal video recorders, set-top boxes, digital cameras, personal digital assistants and car stereos. IDC also predicts that China will become the world's third-largest IT market by 2010.

Launched in January last year, Hitachi GST was the result of Tokyo-based electronics giant Hitachi's acquisition of IBM's hard drive business in December 2002. Since then, the new company has moved to extend the benefits of disk storage - from one-inch to 31/2-inch drives - to various consumer electronics products.