Seagate Technology said Thursday it would set up its third plant in Singapore for producing recording media for its hard drives, investing S$1.3 billion (U.S. $819 million) in the facility, which will be built near its existing factories in Woodlands.

The four-year project has the potential to create 3,000 new jobs when the plant becomes operational and reaches full capacity, the Scotts Valley, California-based company said. The new plant will require an immediate increase in staffing of nearly 1,000 employees.

Seagate expects to begin manufacturing at the plant by mid-2008. Manufacturing on the first production floor could begin in the first half of the year. The three-story plant will cover about 54,000 square meters.

“Singapore has been a key strategic site for Seagate and today’s announcement essentially establishes the country as Seagate’s central media manufacturing hub,” Seagate CEO Bill Watkins said in a statement.

He said Seagate will continue to make strategic investments in Singapore in partnership with the island’s government.

Expanding Lead

Teo Ming Kian, chairman of the Singapore Economic Development Board, noted that Singapore accounted for 25 percent of the world market share for disk media in 2005.

Seagate enjoys a large lead in the hard disk market and shipped 119 million disk drives in its past fiscal year. The company follows a vertical integration strategy of owning its own component manufacturing facilities.

The company set up its initial plant in Singapore in 1996, which was its first for recording media outside North America. The Woodlands plant is now Seagate’s largest media-manufacturing facility and accounts for about 60 percent of the company’s internal output.

Seagate also operates recording media operations plants in Milpitas, California, and in Northern Ireland.

Shares of Seagate Technology fell $0.04 to $23.01 in recent trading.

Contact the writer:MCohn@RedHerring.com

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