Japanese earthquake potentially causes shortages of high tech devices
March 14th, 2011 - 12:25 pm ET by C. D.
In addition to the human and material damage caused by Japans earthquake and corresponding tsunami last Friday, this is a crucial territory for the manufacturing of specific components for the electronics industry, with disruptions likely to last for the coming months.
The earthquake, and notably the following tsunami, has heavily impacted on the Japanese population and economy. While the country is used to earthquakes, the damage caused by the waves is still difficult to evaluate.
Japan is also one of the territories that manufactures electronic components specify used by large globally companies, with the shutdown of production plants surely to have a consequence on both the country’s, and global, economy.
Components like NAND memory chips, LCD and LED displays will surely become more difficult to find on the market, creating shortages in provisioning chains, with the impact possibly even greater for certain in fashion products.
These components are present in a large number of electronic devices, including mobile telephones and tactile tablets, with this likely to have a consequence on the retail price of these devices.
Partial disorganisation, but backup’s exist This could lead to ever increasing price rises by electronic manufacturers. "More than 40% of the global production of NAND memory is manufactured in Japan. It will only take a small slowdown in manufacturing for global prices to sharply spike", warns an analysts Objective Analysis.
And while factories haven’t overly suffered from the earthquake, they are still not able to quickly recommence their production activities due to disorganised transport, human loss and issues with the provisioning of supplies and energy with multiple nuclear reactors currently shut down in the country.
In surrounding countries (Taiwan, South Korea), the factories were also stopped for a few hours on the day of the quake, but have all since recommenced their activity, with very little impact on their production.