Not exactly. Drive bodies are not usually completely sealed so water can flood the interior. However, flash drives do not have movable components or a battery which are often the reason for a water logged device to stop working. Submerging a chip underwater however does not usually affect the data stored on it in any way. In fact, as long as you can completely dry off the chip before use, it should work just fine. The issue becomes when the chip itself is damaged, either from physical harm or excess heat from the drying process. Also, if your drive falls into salt water, you’ll need to rinse it with fresh water and then dry. Salt is corrosive and will create scum and damage important components.
There is a possibility that even if you dry out a drive completely it may have lost its data. This happens if the drive was of poor quality or it sustained damage in some way.
There are several options for water proof USB drives on the market, and many of them have the added perk of shock proof resistance that double up the hardiness of your drive. They are ideal for users who experience a rugged lifestyle or job environment that also need data storage access.
Typically, flash drives advertised as waterproof are in the UDP (USB disk on package) style, which means that the drive contains all components in one piece. They take up the least space, compared with COB (chip on board) type drives. UDP style USB drives are typically shock proof and water resistant and are generally more resistant to damage than other memory styles.