Japan disaster hits electronic components

The knock on effect of the Japan earthquake and tsunami may be felt in the telecoms industry in months to come, as the country is home to some of the world’s biggest suppliers of silicon, microchips and LCD displays.

So far, there are few reports of damage to electronic production facilities, but power and transportation are expected to be heavily impacted in the wake of the natural disasters. Short supply and rising prices of components such as NAND flash memory, dynamic random access memory (DRAM), microcontrollers, standard logic, and LCD parts and materials should all be anticipated.

Japan is the world’s largest supplier of silicon used to make semiconductor chips, generating 60 per cent of the global total, according to industry research group IHS iSuppli. Most of country’s largest electronic component producers operate their manufacturing facilities far to the south of the epicenter of the damage, yet IHS iSuppli expects Toshiba’s shipments of NAND from its central Japan plant could drop by up to 20 per cent in January and February; a Hitachi display plant has been shut down; and production from Panasonic’s LCD fab has been impacted temporarily.

However, the global supply chain has about two weeks of excess component inventory in the pipeline for semiconductor parts affected by the quake. Because of this, the shortages are not likely to appear until the end of March or the start of April but are likely to linger until the third quarter, iSuppli said.

The biggest impact will likely be felt through outgoing shipments from Japan, which are likely to be suspended or delayed over coming weeks.

Donate and support disaster relief via the American Red Cross