An article in the New York Times (Jan 20, 2012) describes the quandry faced by hard drive manufacturers in Thailand whose plants were deluged during the floods.  Slow recovery of manufacturing raises the benefit of concentration of this industry (40-45 % of world production by over 60 companies) in Thailand.  Should the benefit of economies of scale and the supply of skilled workes justify the risks of sourcing in one location ? Should hard drive firms create a portfolio of production sources, albeit at different cost levels, to enable sourcing flexibility ? How should the Thai government react to retain the hard drive industry and reassure manufacturers that the sourcing risk is manageable ?