News

posted on 16 July 2008 15:33

Seagate is closing its Milpitas disk drive media manufacturing plant, mirroring the closing down of its Limavaddy, N Ireland, media plant.

A Seagate 8K SEC filing states: 'On July 9, 2008, Seagate Technology (“the Company”) announced the proposed closure of its media manufacturing facility in Milpitas, California.'

'The closure is part of the Company’s ongoing focus on cost-efficiencies in all areas of its business. The Company plans to cease production at the Milpitas manufacturing facility on October 3, 2008. The Company currently estimates the restructuring, exit costs and other charges to be approximately $74 million, of which approximately $36 million are expected to be cash. These charges include severance of approximately $21 million, accelerated asset depreciation of approximately $38 million and approximately $15 million of other exit costs. The Company intends to record approximately $19 million of the severance charges as restructuring costs in its Statement of Operations for its fourth quarter of fiscal year 2008. The Company expects to record approximately $43 million of charges relating to the closure in its Statement of Operations for its first quarter of fiscal year 2009, of which approximately $38 million relating to accelerated asset depreciation will be recorded to cost of revenue. The remaining charges are expected to be incurred over the balance of fiscal year 2009. The Company aims to realize annual savings of approximately $42 million in connection with the Milpitas facility.'

The media manufacturing is going to be concentrated, it is thought, in China.