Seagate is restructuring its HDD division and has decided to shut down a HDD manufacturing facility in Suzhou, China. The Suzhou factory has a footprint of 1,103,000 ft², it's one of the company's largest plants and its closure will significantly lower Seagate's HDD output.
It's unclear what Seagate's further plans are for the property. AnandTech reports Seagate got its hands on the factory via the 2006 acquisition of Maxtor. Production at the plant has already ceased and all ~2,200 employees will be laid off on January 18, 2017.
“As part of our continual optimization of operational efficiencies, Seagate has made the difficult decision to shut down its factory in Suzhou, China,” an alleged statement by Seagate reads. “We regret that our Suzhou employees will be affected by this action, which reflects our ongoing commitment to reduce Seagate’s global manufacturing footprint and better align the business with current and expected demand trends.”
Last year Seagate revealed it would lower its HDD manufacturing capacity from 55-60 million disks per quarter to just 35-40 million units per quarter. No changes are made to the plants that make heads, media and substrates. This is because even though HDD unit sales are collapsing, average capacities are increasing due to strong demand from datacenters. Furthermore, demand for HDD heads is increasing due to new production technologies:
Therefore Seagate may not need to produce a lot of drives, but it needs to pack about the same amount of heads and platters into fewer HDDs. Moreover, in the coming years, the company will need more heads because of new manufacturing technologies (TDMR, HAMR, etc.) and more media because it can now pack more platters into high-end helium-filled drives.