“Shenzhen has become the global hard disk design and manufacture center of Hitachi GST. With the increasing expansion of international market demands, Hitachi GST will add more and more importance to the “Super Hard Disk Production Center” situated in Shenzhen Export Processing Zone, and will add more production lines and expand the scale.”

-- Dirk Thomas, Greater China Division President and Vice President of Hitachi Global Storage Technologies

Dirk Thomas, who has served for IBM and Hitachi GST for nearly 30 years, is a vane figure for the international hard disk society. As the Greater China Division President and Vice President of Hitachi GST, he has recently won the highest honor granted to foreigners by the Chinese Government – “China National Friendship Award”. In recent days, in order to celebrate the delivery of the 50,000,000th hard disk to the global hard disk market by Hitachi GST, he came to Shenzhen joyfully. In an interview, he not only made predictions on trends of the international hard disk industry, but also highly recognized the magnetic head, magnetic disk and hard disk production bases of Hitachi GST in Shenzhen.
He revealed that Shenzhen has become the global hard disk design and manufacture center of Hitachi GST, and with the increasing expansion of international market demands, Hitachi GST will add more and more importance to the “Super Hard Disk Production Center” situated in Shenzhen Export Processing Zone, and will add more production lines and expand the scale. In addition, the company will increase the output of magnetic disks in Shenzhen. From the end of this year to 2007, weekly output of magnetic disks is predicted to reach 1 million disks.
Life becomes wonderful due to hard disks.
Journalist: From zero to prosperity, hard disks have experienced a development of fifty years, and have completely changed the data storage method of the world. Then, what status does Hitachi GST take in the hard disk industry?
Thomas: Hitachi GST takes a pioneer status in the hard disk industry. It is the inventor of hard disks. In 1956, IBM released the first desktop hard disk RAMAC, which was a marvelous invention.
Hitachi GST was a strategic merger between the storage technological businesses of both IBM and Hitachi in 2003. The company is devoted to providing comprehensive storage solutions to satisfy diversified user needs to enjoy digital lives in office, outdoors & indoors. Relying on the miniaturization of products and the enhancement of storage volume, efficiency and reliability, Hitachi GST has set up the new criteria for hard disks.
Strategic focus is moving towards China.
Journalist: In the global strategic layout of Hitachi GST, where is the position of China?
Thomas: Looking back on the history, all of the manufacture and development of Hitachi were carried out in America, Japan, and Europe. Currently, only a few remain in Europe. The majority of the manufacture work has been moved to the Southeast Asia. With time goes by, the strategic focus will be transferred from the Southeast Asia, to China especially.
In effect, the largest hard disk production center of Hitachi has settled down in China. Hitachi GST has planned to put its 3.5 inch desktop hard disk production center in China. In addition, another relatively big production center is in Thailand, and the enterprise class hard disk production center is in Singapore.
Journalist: Where is the major R&D center of Hitachi? Is there any scheme to move it to Asian areas, such as China?
Thomas: Basic R&D activities of Hitachi are in Japan and the United States. Actually, I’ve been thinking about this question for years. Has Hitachi GST has the ability to move its R&D to the Southeast Asia gradually? Some manufacturers have done so, but most of them have chosen Singapore, because it’s a rather difficult thing and a complicated and long-term problem.
The Shenzhen base shows the magnetic field effect, the hard disk industrial chain is emerging rapidly.
Journalist: How will Hitachi GST plan its business in China? In which regions will the hard disk production be carried out mainly?
Thomas: Hitachi GST has moved its strategic focus to China. Presently, 50% of its hard disks are manufactured in South China. Hitachi’s Shenzhen base plays a very important role not only in the local market, but also in the entire production and supply chain of Hitachi.
By investing USD500 million in Shenzhen to set up the Super Hard Disk Production Center, Hitachi GST has become the largest hard disk industry investor of the region. Hitachi Shenzhen Super Hard Disk Production Center started to operate in June 2004. The first batch of hard disks was delivered in 2006. Total output has reached 1 million disks. Till the end of this year, its production capacity will reach its limit, so that we will continue to expand the scale.
In August 2003, Hitachi GST announced its plan to expand the magnetic disk production business in Shenzhen. Hitachi Global Storage Technologies (Shenzhen) Limited, which is situated in Shenzhen bonded zone, is Hitachi GST’s largest magnetic disk production base in the world. From the 4th quarter of 2005 till now, the company has produced 50 million HDD magnetic disks. From June 2006 till now, it has produced nearly 2 million HDD vertical recording magnetic disks.
In last year, Hitachi set up a design center in Shenzhen to assist local OEM partners to assembly hard disks in various consumer electronic products. The Hitachi design center focuses on the following three fields in hard disk application: MP3/PMP, digital video recorders, and mobile phones. In addition, Hitachi GST has entered into a long-term hard disk production agreement with China Great Wall Technology Limited, and has authorized ExcelStor Technology to produce and sell Hitachi GST’s 3.5 inch desktop hard disks in Shenzhen, as well as some ExcelStor hard disks with its self-owned brands.
Journalist: Currently, Hitachi GST has set up magnetic head, magnetic disk, and hard disk production bases in Shenzhen and there are a lot of suppliers in the neighborhood. Does the company plan to integrate the industrial chain efficiently?
Thomas: Hitachi GST always encourages suppliers to be rooted in Shenzhen. Now, 70% material suppliers of Hitachi hard disks have settled down in Shenzhen. The supply chain is mainly within the 60km range with Shenzhen as the center to include component manufacture, supplier network, product assembly, and hard disk assembly. This advantage improves the efficiency, and shortens the time to market, and strictly controls the quality and delivery of products.
At present, magnetic heads and magnetic disks for Shenzhen Super Hard Disk Center still require importing. In order to build a prompter supply chain, Hitachi GST is attesting magnetic heads and magnetic disks produced by Shenzhen Mass Storage and Hitachi GST (Shenzhen), hoping to develop an integral and highly efficient hard disk industrial chain in Shenzhen. Meanwhile, Shenzhen base is now manufacturing 3.5 inch hard disks, including single magnetic disk and multiple magnetic disks. 2.5 inch hard disks are also manufactured in Shenzhen. Hitachi GST will further integrate them. The Super Hard Disk Center possesses the equipment and ability to produce both 3.5 inch and 2.5 inch hard disks. However, after comparison and analysis, its advantage in 3.5 inch hard disk production will still be exerted.

Extracted from Shenzhen Commercial Daily