TDK Opens a New Plant in Irvine to Make Micro-Disks

TDK Corp., the Japanese electronics giant, has opened in Irvine its first U.S. plant to manufacture computer micro-disks, TDK officials said.

TDK officials said the decision to transfer micro-disk production from Japan to the United States was made largely because of anti-dumping duties imposed on Japanese micro-disk manufacturers earlier this year.

The plant, which began production last month, will produce 3.5-inch “floppy” disks, devices for storing information in microcomputers, company officials said. The palm-sized, high-density polyester disks have been rapidly replacing 5.25-inch disks as the standard storage device for microcomputers.

TDK employs 500 people in Irvine, where it has been manufacturing audio cassette tapes since 1973.

The company initially has hired 60 people for the micro-disk operation and plans to hire 70 more after the plant is running at full capacity later this month.

In February, the Commerce Department ruled that Japan was “dumping” micro-disks in the United States at up to 51% less than their fair value. Dumping is defined as selling a product in the United States at prices below the production cost or price in the home market.

The Commerce Department has imposed duties ranging from 27% to 51% on Japanese micro-disk manufacturers. Although TDK was not specifically cited in the Commerce Department’s anti-dumping ruling--Sony Corp., Fuji Photo Film Co. and Hitachi Maxell Ltd. were cited--it has been subject to stiff duties.

“It is no longer economically viable to import these products from Japan to the United States,” said Ken Aoshima, a vice president of TDK USA Corp., the Japanese company’s U.S. subsidiary. “We have had to pay almost a 50% tax.”

A secondary reason for moving micro-disk manufacturing to the United States is TDK’s strategy of producing more of its products closer to the international markets where they are sold, Aoshima said.

The Irvine plant will produce 3 million micro-disks per month at full capacity, TDK officials said.

The Japanese dominate the micro-disk industry, but TDK is not one of the largest Japanese producers, Aoshima said.

“We think the market (for 3.5-inch disks) will grow very significantly in the next five years,” Aoshima said. “The profitability may not be so high, though, because it is a very competitive market.”