Hitachi plans big increase in Microdrive production

Hitachi is planning to double production of hard-disk drives at its plant in Prachinburi, Thailand, the company said Monday. The company's Hitachi Global Storage Technologies (HGST) unit will invest US$200 million over several years to achieve the increase in capacity.

Production of the company's 4G-byte capacity 1-inch Microdrive disk drives, which are found in digital music players such as Apple Computer's iPod mini, will see the largest increase in percentage terms, said John Osterhout, director of marketing for Microdrive at HGST.

"We are seeing very strong demand for 1-inch drives," he said. "They take up a small percentage of the factory today but we will be expanding capacity from 200,000 units per month in the first quarter (of this year) to several million [m] in the fourth quarter of this year so it's a very rapid expansion in capacity. Fuelling the very strong growth is demand from customers who are building these drives into small MP3 players."

The company wouldn't be any more specific on which companies or products, if any, are primarily driving demand, although some signs point to Apple and its iPod Mini.

Apple launched the iPod Mini in the U.S. in February with 100,000 preorders placed for the US$249 music player. The company was due to follow with a worldwide launch in April however in March was forced to delay that to July because of problems meeting demand, it said.

"The supply for the iPod mini is limited because we're using new technology," Greg Joswiak, Apple's vice president of hardware product marketing told IDG's MacCentral at the time. "We're using just about all of the (4G-byte) 1-inch hard drives that are being made."

Apple hasn't provided detailed shipment figures for the iPod Mini but has said total shipments of iPod and iPod Mini players in the three months from January to March totaled 807,000 units.

In addition to Apple, HGST also provides its 1-inch Microdrive hard disks to companies including Singapore's Creative Technology Ltd. and the Rio Audio division of Santa Clara-based Digital Networks North America Inc. and Osterhout says he expects more companies to join that list soon as new music players are launched.

"There are many companies that could be making hard-disk drive-based MP3 players," said Osterhout. "I probably have talked to 20 companies that are already in the MP3 business. It's a long list of companies. This is open season in a growth category."

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