Hard Drive Shortage and Thailand Flood Impact Leave a comment

It is not known yet just how devastating the flooding in Thailand will be this year, but some estimates say about 20% of the country is now flooded.  Thailand is one of the largest producers of hard drives in the world, so the technology industry is bracing itself for scarcity.

According to reports in the New York Times and Forbes, business initiatives that rely on cloud computing and off-site storage may have some setbacks to deal with in the next two to three quarters.

According to John Monroe, research vice president at Gartner, a technology research firm, there are more ramifications of the flooding in Thailand than what people are considering presently.  He gives examples of Google and Facebook whose dependency on high-capacity storage is critical.  If storage does not have the capacity to grow at its normally accelerated rate, the highly present and immediate orientation of these two giants could suffer immensely.  Major problems could be just around the corner for the internet.

The implications for video storage are also considerable.  As the security industry moves more and more into cloud storage, the necessities of off-site storage capacity are growing exponentially.  Consumers and businesses will not only have to deal with the ability to store information remotely, but they may have to reconsider the storage capacity requirements of new HD technology just as the industry is bringing HD costs down on the production side of the business.

Early guesses are that the impact could last for about a year at most, but really, no one knows just how devastating the floods are nor how much has been destroyed.  The assumptions are that the hard drives needed for technology production have been met and shipped through the December orders.  But, consumers can expect the price of goods and storage to rise quickly, in part because of the coming holiday shopping season, but also because they must brace themselves for scarcity for the next 12 months.

If they take their cues from oil companies, the crisis may establish a permanent safety threshold for future pricing.  The ones who suffer will be the buyers and users of future storage.