Singapore's electronics industry has been losing manufacturing jobs to lower-cost countries like China.

In comes Seagate with its new factory at Woodlands and a US$819 mln investment to save the day.

Construction for the plant is scheduled to start in the first half of 2008 and expected to be completed two years later.

It will start off with 1,000 workers but will expand its staff strength to 3,000 in time.

Seagate plans to produce storage media similar to compact discs, that store data in hard drives at the new factory, supposedly the world's largest of its kind.

Together with its existing facilities in Woodlands, it will supply about 80% of Seagate's recording media needs.

This is a significant development because soon after Seagate acquired Maxtor Corp in December last year for US$1.9 bln, it announced it would eliminate about 6,400 jobs at Maxtor.

The former cut about 2,000 workers in Singapore, but said it may hire some of the former Maxtor employees at a new plant.

When the takeover happened, local investors in stocks like Brilliant Manufacturing, Jurong Technologies and Unisteel Technologies sold off their shares.

Brilliant, especially, was expected to suffer because Maxtor was a major customer and contributed about 80% of its revenue.

On the other hand, MMI, Seksun Corp and Beyonics Technology became attractive because they were Seagate’s regular suppliers.

Now that Seagate’s coming into town in such a big way, how would it affect these counters?

For starters, I was enlightened that none of these companies actually make parts needed in the media plates Seagate intends to produce at its new plant.

So there is no direct impact on these stocks whatsoever.

But the latest I’ve heard about ex-Maxtor suppliers Brilliant and Unisteel, are that they have gotten themselves on Seagate’s list of preferred suppliers.

A tech analyst friend of mine said having Seagate closer to home would have a positive impact on its suppliers here, even if they don’t provide materials for the new plant’s production. Yet.

Perhaps having their customer this close to them, Brilliant, Seksun and gang might still be able to work something out with Seagate.

After all, the factory will only be completed in 2010, so between now and then, there’s plenty of time to explore some options.

It will be interesting to see what these companies come up with in the next few years.

Especially when the global hard-disk drive industry is estimated to hit US$40 bln in 2009, and we’ve got the world’s largest hard-disk drive maker in town.

Serene Lim