History (1993): IBM in Havant, UK, to Manufacture WD’s HDDs for Europe

Western Digital Corp. (Irvine, CA) has entered into an agreement with IBM (Havant, England) in which this last one will assemble, test and package WD Caviar drives, beginning the last quarter of 1993 .

The agreement is for an initial 18 months, according to the Financial Times (September 29, 1993).

Big Blue will produce the Caviar AC1170 (170.8MB), AC1210 (21 2.6MB), AC2250 (256MB), AC2340 (341.3MB) and the AC2420 (425.3MB) 3.5-inch HDD drives.

Production units will be available beginning 1993, ramping to full volume shipments during 1994. 25,000 to 30,000 drives are expected to be manufactured before the end of the year, then 90,000 to 100,000 per quarter in 1994.

The Caviar drives made at Havant will be supplied to WD customers throughout Europe.

In FY93, the company booked $300 million in revenues and shipped approximately one million disk drives in Europe. The objective covers $500 million as soon as 1995. The agreement will complement disk drive assembly, testing and packaging facility in Singapore, where Caviar drives will continue to be produced for its customers throughout the world .

“It is a step that will enable us to expand our drives capacity to match market demand without major capital commitments, “said Charles A. Haggerty, COB, president and CEO, Western Digital.

“Western Digital is a top quality player in the market, and we look forward to a mutually ben eficial partnership,” said Ken Wilkie, IBM Havant.

In this venture, WD is very quickly acquiring an European manufacturing at very little expenses.

“It’s only a subcontracting manufacturing agreement,” said Haggerty.

His company will buy drives produced by the plant. At what price? “The price difference is only 4.5 to 5% compared to our costs in our Singapore plant. It’s about the price of duties.”

In the agreement, it was not written that IBM planned to buy drives manufactured for WD nor that it is was going to manufacture 2.5- inch or 1.8-inch drives, but only 3.5-inch units in its Architecture I.

At this time, WD said it has shipped units more than 3 million since 1992.

In the company’s sector, drives ranging from 170 to 420MB, IDC believes that WD’s worldwide market share in 1993 represents 19.3%, behind Seagate (25.9%), Quantum (21.5%) and Conner (21%) and in front of Maxtor (12.4%).

Jack Hockley, GM Europe for WD, states on his side a little less that 20% the worldwide share for his company for all 3.5-inch disks, and to about 13% in Europe and thus believes that it is possible to considerably increase European sales .

A few months ago, IBM had thought about closing its Havant plant which had a quarter of a century of experience in the assembly of 14-inch to 3.5-inch drives. It was not included in AdStar (San Jose, CA) as an IBM business unit when it was set up still isn’t.

Today, the existence of Big Blue’s plant, directly depending on IBM UK, is not questioned.

According to Jack Hockley, who recently left IBM Havant for WD, three fourth of the plant’s production is for AdStar, that IBM Corp.’s chairman, Lou Gerstner, has decided to not make into a subsidiary. Even the name AdStar was left out and replaced by IBM Storage Division.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 69, published on October 1993.

Note: IBM sold its Havant plant on January 1995.