Quantum outlines future of Penang plant

Quantum Corp plans to transfer most of the production of its Super DLTtape storage drives to Malaysia by year end to save on costs.

SINGAPORE--Quantum Corp plans to transfer most of the production of its Super DLTtape storage drives to Malaysia by year end to save on costs.

The Super DLTtape drives, which began shipping in early March, are currently being manufactured in Colorado Springs.

A certain amount of manual assembly work is required, and Southeast Asia is a good place to find cheaper labour, Quantum Asia Pacific vice president for sales David Rawcliffe explained.

A successor to Quantum's DLTtape systems, Super DLTtape is touted as providing faster access to data and greater storage capacity. At present, the DLTtape systems are only manufactured in Penang, Malaysia.

The Penang plant--which has a total headcount of about 1,000 people--will continue to focus on high-volume manufacturing for the company in the long term, Rawcliffe noted at a press conference Wednesday.

However, he noted that only about 400 staff and 40 percent of the factory's floor area are devoted to DLTtape production.

The remaining resources are channeled to hard drive repair, as part of a service agreement with Maxtor Corp, which bought Quantum's hard drive business. The acquisition was completed in end March.

Quantum hopes to exit the hard drive repair business ultimately, but Rawcliffe could not reveal the timeframe for that.

When asked if the 600 staff involved in hard drive repair will eventually be laid off, he pledged: "We target to keep all employees."

That goal is not unachievable. "They are basically involved in electronics assembly and disassembly. With some training, their skills are transferable to DLTtape production."

However, Rawcliffe does not expect additional capital to be injected into the Penang plant. "With the slowdown in enterprise spending, we have to be cautious about our investments."

The Milpitas, California-based company is also known for its high-end ATL line of tape libraries and the Snap line of storage servers.

For the third quarter ended December 2000, Quantum had revenues of US$369 million from its DLTtape, ATL tape libraries and Snap line of products, as well as services such as consulting and installation support.

Its sales for the year ended March 2000 were US$1.4 billion, with a third of the revenues derived from services.

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