The impact of flooding in Thailand on PC inventories going into the holiday has been widely reported, but an obvious connection we’ve been missing has been raised by the New York Times, and it’s an important one. According to interviews conducted by Nick Bilton, cloud computing could grind to a halt early next year as storage prices skyrocket, and supply reaches historic lows. Flooding in the region has shuttered more than 1,000 factories, including several which are responsible for pumping out a significant percentage of the world’s mechanical hard drives. 

A few days ago we were speculating, along with the rest of the web, that the massive flooding in Thailand could end up playing havoc with the mechanical drive industry. New images of Western Digital’s flagship production facility just barely above water have surfaced (no pun intended), along with dire predictions from CEO John Coyne. According to Coyne, the water damage will result in significantly reduced hard drive supplies going into 2012. 

Mechanical drives might be a bit on the slow side, but the price per GB still makes them king among digital packrats.  The technology behind today’s 2 & 3TB drives is currently known as perpendicular magnetic recording, but recently we seem to have hit a wall. Manufacturers are already hard at work on 4 platter-4TB drives, but were starting to reach the limitations of what’s possible. Luckily a recent collaboration by the remaining mechanical drive makers has begun to pay off, and the Storage Technology Alliance believes it has discovered a way to use lasers to blast to 8TB and beyond.