By Yu Takeuchi
PHNOM PENH, NNA - Major Japanese optical glass maker Hoya Corp. will build a hard disk drive glass substrates plant in Laos to meet growing demand from ballooning global data traffic.
It plans to invest about 30 billion yen ($273 million) to produce 3.5-inch substrates starting in June 2020. A groundbreaking ceremony will be held Friday, sources familiar with the matter told NNA.
The Japanese company has 100 percent market share in volume terms for the 2.5-inch glass substrates for HDDs for laptop computers, external data storage units and game consoles among other devices, but it faces stagnating sales as demand shifts to solid state drives.
On the other hand, Hoya holds about a 10 percent share by volume in the global 3.5-inch substrate market, which has rapidly grown thanks to a surge in the world’s data traffic prompted by services of IT giants like Google’s Alphabet Inc., Amazon.com Inc. and Microsoft Corp. Hoya expects to have further space to grow.
The plant, occupying a roughly 200,000 square-meter plot in the Chinese-developed strategic Saysettha Development Zone on the outskirts of Vientiane, will have a monthly output capacity of 10 million units.
Hoya’s Laotian unit, established in November 2018, plans to employ up to 4,000 workers by around June 2021, when the factory is scheduled to be operating at full capacity, according to the sources.
Hoya has relocated HDD glass-substrate production from Thailand to integrate with operations in Vietnam. Two factories in Vietnam make both 2.5-inch and 3.5-inch products and are operating at full capacity.
The Japanese company, which also produces endoscopes, glass lens and imaging equipment, has tapped Laos to take advantage of lower labor costs and electricity fees as well as rich water resources. Glass substrate production requires large amounts of water and electricity use for polishing.
Sales of 3.5-inch products account for 15 percent to 20 percent of Hoya’s total HDD glass substrates revenue of about 75 billion yen in the year to March 2018. They almost tripled in the October-December quarter of 2018 from a year earlier, the sources said.
Hoya aims to boost its global market share for 3.5-inch substrates to 30 percent by 2021 from about 10 percent now.