El Segundo, Calif. - Worldwide hard-drive production will return to pre-Thailand flood levels by the third quarter of 2012, according to an IHS iSuppli report.

The report gives a glance at the full impact the flooding had on hard-disk-drive (HDD) production starting in Oct. 2011.

IHS iSuppli Figure: Quarterly Worldwide HDD Unit Shipment Forecast (Millions of Units)    Q4-11  Q1-12E  Q2-12E  Q3-12E  Q4-12E  Millions of Units Shipped 124 140 160 178 185 Annual Percentage Change -26% -13% -5% 2% 49% Source: IHS iSuppli February 2012

According to IHS storage analyst Fang Zhang, year-over-year production fell 26 percent in the fourth quarter of 2011. This situation is slowly starting to reverse itself as HDD makers Western Digital and Seagate began placing their manufacturing facilities back online in the last month.

First-quarter 2012 production will be down 13 percent year over year and down 5 percent in the second quarter. Only in the third quarter will shipments increase slightly: 2 percent.

By the fourth quarter, production will be fully up to speed, with shipments almost 50 percent higher than what took place during the height of the flooding in 2011.

On a sequential basis, Zhang said, the recovery can be seen as quite rapid. First-quarter shipments are 13 percent higher than in the fourth quarter, and these will grow 14 percent in the second quarter and 13 percent more in the third.

The dearth of supply pushed HDD pricing up 28 percent in the fourth quarter of 2011. Pricing will decline as supply builds, but Zhang is only predicting a 3 percent drop during this quarter and an additional 9 percent during the second quarter.

Another factor keeping prices high is the new position Seagate and Western Digital hold. Each has absorbed a major competitor in the last year, with Seagate buying Samsung's storage business and Western Digital burying Hitachi GST. This will enable higher prices due to lack of competition.