A Flood on the Disk-Drive Market

Thailand has become an increasingly important hub for the manufacturing computer components, especially hard disk drives, about a quarter of which are made there. So the devastating floods that have recently engulfed the Bangkok area stand to disrupt global supply of hard drives, very possibly sending prices upward and causing computer sales to dip over the coming months.

Western Digital, for example, the world’s largest hard-drive maker, has more than half of its production located in the Bangkok area, where it maintains two facilities for the assembly of hard drives and disk heads, one at Nava Nakorn Industrial Promotion Zone, located some 40 kilometers north of the city center, and another even farther north at the Bang Pa-in Industrial Estate. Both industrial centers are situated in low-lying areas near the Chao Phraya River, which threads that city and which has of late been topping over its banks because of uncharacteristically heavy monsoon rains. The consequent inundation forced Western Digital to close its Thai factories in the middle of October. The flooding has affected many other hard-drive manufacturers, or companies that produce components for hard drives, as well.

So like with last March’s earthquake and tsunami in northeastern Japan, the vulnerabilities of the ever-more-interdependent global economy to supply-chain disruptions from natural disasters is evident. Bad as that is, computer makers (and consumers) should be grateful that hard drives are pretty much commodity items and that a three-quarters of them are built elsewhere. So computer manufacturers are unlikely to suffer from the kinds of critical outages that affected parts of the auto industry in the wake of the Japanese disasters earlier this year when sole-source suppliers for certain auto components went off line.

PHOTO: Petty Officer 1st Class Jennifer Villalovos, Flickr

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