Suppliers of hard drives have warned of escalating prices and possible shortages following Thailand’s worst floods in five decades.

Disruption to the production of optical storage devices has drawn comparisons with the Japanese earthquake and tsunami, which devastated tape factories and led broadcasters and facilities to speed up the transition from tape to filebased workflows.

Western Digital’s Thailand operation, where 60% of its drives are manufactured, has been suspended, prompting set-top box manufacturer Pace to issue a profit warning last week. Shipments of its devices, which rely on Western Digital drives, will be delayed.

Seagate’s Thailand factories are still operational but the company warned that components will be “constrained” because of disruption to the supply chain.

A statement said: “Given the volatility of the situation, it is unclear what the magnitude of the supply chain disruption will be.”

UK storage and media supplier PMD Magnetics’ national account manager Sam Wilks said the most significant aspect was the disruption to Nimec, which supplies 70-80% of the components used by hard drive manufacturers.

He said the interruption to the supply of components would also likely affect other manufacturers, including Hitachi, Verbatim and LaCie.

“Similar to the Japanese disaster, the level to which brands are affected will probably come down to how well stocked they are and the level of inventory in the channel. We don’t anticipate supply issues to be immediate. The true impact is likely to be felt four to six weeks down the line.”

Origin Storage managing director Andy Cordial said that distribution of hard drives “pretty much halted” last week, and warned that prices could rise sharply, with product supply limited as panic buying sets in, resulting in longer lead times and increased demand for higher-capacity drives.

“We cannot see any improvement in supply this quarter. I can see the situation getting worse before it gets better.”

Cordial raised concerns that speculators might try to cash in on the situation if the supply chain remains constrained.

“Distributors are trying to be responsible by limiting supply,” he added.

There has been no reported impact on the supply of flash memory.

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