At least that’s according to sources within one hard drive manufacturer. Costs are expected to continue to rise – and demand will increase as product dries up. Hardest hit will be mobile products, followed by consumer drives. According to industry sources, drive production for Western Digital – the hardest hit by the Thai flood – will be nearly cut in half for the year.

Manufacturers are expected to shift production to enterprise level drives to increase revenue, but this going to leave most of the consumer market, including PC manufacturers out in the cold. Already pricing has skyrocketed – last week a 1 Terabyte hard drive cost $69 – now it’s $199. It’s going to get worse before it gets better, and one source within WD told us to, “get your drives by Monday.”

It’s not all bad news though. WD is doing a lot to help the local Thai people and the Thai economy. The CEO of WD has committed to continuing to pay each of the 37 thousand out of work employees of the company. This is costing the company approximately $500,000 USD per day. WD has also set up a fund to collect donations for Thailand, and they are helping smaller factories in the area rebuild and relocate. Since WD does not produce all of it’s own components, this will also put WD in a very good position to strengthen their relationships with these companies and hopefully lower future costs. That said, the future is further away than I think any of us would like, and not even WD’s large budget surplus can speed it up.