New York - Production of hard disk drives (HDD) and digital cameras is being severely curtailed due to the flooding in Thailand, said IHS.
The HDD industry will see a fourth-quarter output decline of 27.7 percent, down to 125 million units, from 173 million made during the third quarter. This is the largest drop since the fourth quarter of 2008 when the recession had reached its deepest point.
This production downturn will result in a significant HDD shortage for the next two quarters, forcing up HDD prices for both OEMs and consumers by at least 10 percent in the short term and perhaps hitting 30 percent later in the year.
Western Digital is likely to lose its status as the world's largest supplier of HDDs as 60 percent of its production capacity has been shut down due to the floods. Toshiba can also expect to drop, as it makes 50 percent of its drives in the affected zones.
The laptop market will be among the worst hit, with shortages having an impact starting early next year. However, IHS said it believes the situation will begin to rectify itself by the second quarter as production comes back online and other HDD sources.
In the digital camera market, Sony, Nikon and Canon have all had manufacturing halted or slowed, forcing these companies to decrease shipments through the first quarter of 2012.