Japanese earthquake to disrupt IT component supply


Japanese earthquake to disrupt IT component supply

Microscope contributor

The Japanese earthquake that struck the north-east coast of the country may well cause major disruptions to the IT component supply chain.

The 8.9-magnitude quake, which hit roughly 250 miles from the capital Tokyo at 5.46am GMT, followed by aftershocks, unleashed a tsunami as high as 10 metres across the Miyagi and Fukushima prefectures, the home of manufacturing zones.

This could spell potential disaster for the components industry, said Malcolm Penn, CEO of semiconductor analyst Future Horizons.

"Japan produces around 20-25% of the world integrated circuit production (IC), the biggest of which is Toshiba/SanDisk," he said, "[and] half the world's NAND Flash production".

The situation is made all the worse because "no-one holds inventory any more" he said, warning the disaster may "bring the NAND market to its knees".

A number of manufacturing plants are located in the north and south of Tokyo and the quake will have "certainly killed whatever was being processed at the time" said Penn, who forecast IC supply will be impacted in Q2 to a certain degree.

Operations at Sharp's new LED display plant in Sakai have been halted and networks and mobility vendors are also trying to assess the impact on supply chains this afternoon.

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