UPDATE 1-Avnet sees hard-drive price jump due to floods

* Avnet attempts to pass on higher costs

* Industry could take over three quarters to recover

* Thailand is No. 2 exporter of hard drives, after China

SAN FRANCISCO, Oct 28 (Reuters) - Electronics distributor Avnet is charging customers up to 40 percent more for hard drives in a bid to preserve margins after flooding in Thailand created a shortage that could last over three quarters, a senior company executive said.

Top hard drive makers Western Digital Corp and Seagate Technology Plc both have plants in Thailand, where flooding has killed at least 377 people since July and devastated industrialized areas in the center of the country.

"Our drive manufacturers across the board have increased prices. The word we're getting is that prices are going to continue to go up. This isn't going to be a one-time event," Chuck Kostalnick. senior vice president of Avnet Embedded Americas, told Reuters on Friday.

He said manufacturers have raised their prices by 20 to 40 percent and that Phoenix, Arizona-based Avnet in turn has raised the prices it charges to personal computer manufacturers by a similar amount in an effort to safeguard its profitability.

"We're trying to keep this as a neutral situation for us. We're trying not to lose anything through this process," he said.

Thailand is the No. 2 exporter of hard drives, used in laptops, servers and TV set-top boxes, and damage caused by flooding across the region could reduce world output of hard drives as much as 30 percent in the final three months of 2011, according to market research firm IHS iSuppli.