Hitachi Global Storage Technologies (GST) is to shift most of its hard-disc media manufacturing from plants in the US and Japan to China within the next three years.
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The company, which was formed at the beginning of this year when Hitachi bought IBM's storage operations, operates media production plants in San Jose and Odawara. The media is the part of the hard disc drive on which data is written.
Hitachi GST said part of the reason for shifting operations to China is because it is geographically closer to its Southeast Asian assembly plants where the media is combined with other components to make a hard disc drive. Those assembly plants are in Singapore, the Philippines and Thailand.
The other part of the reason for the shift is that it is cheaper to produce disc media in China .
The US and Japan plants will remain as Hitachi GST's primary media production facilities until the end of 2005. Initial media production is expected to begin in Shenzhen in the fourth quarter of 2004 and the factory is expected to be in full operation in the first half of 2006.
The San Jose and Odawara plants will not shut down completely once the Shenzhen plant is open. The San Jose plant will remain in operation for development and pilot production of leading-edge media while the Odawara plant will continue to work on innovative drive technology, such as perpendicular recording.
The company employs around 800 people worldwide and would not comment on the possibility or size of potential layoffs at the San Jose and Odawara operations.
Martyn Williams writes for IDG News Service