Flash memory supplies hit by Japan earthquake

Flash memory chips, a key component in tablet computers and smartphones, could become another casualty of last week's earthquake in Japan, with one market research firm anticipating "phenomenal price swings and large near-term shortages" as a result of the disaster.

Over 40 per cent of the world's NAND flash is manufactured in Japan, and around 15 per cent of the world's DRAM. In a report released on Friday, market research company Objective Analysis said it expected the disaster to cause major disruption to the world semiconductor market. Spot prices of flash memory are reported to be up by more than 20 per cent today on news of the potential shortages.

The quake, which measured 8.9 on the Richter Scale, struck offshore at 14:46 local time, 230 miles northeast of the capital Tokyo, sparking a series of huge tsunamis that struck the coast around the city of Sendai. Estimates of the death toll have reached as high as 10,000 people.

Search giant Google created an online People Finder to help locate victims of the disaster, as aftershock measuring up to 7.1 continued to strike.

Although most of Japan's semiconductor industry is located well beyond the 60-mile radius of the earthquake zone, it is feared that production could be affected by transport problems and a series of power outages caused by the quake.

Memory supplier SanDisk, which sources much of its flash production from a Toshiba facility in Yokkaichi, confirmed in a statement of Friday that production had been hit.

"The epicentre of the powerful earthquake was approximately 500 miles from Yokkaichi, Mie Prefecture, Japan, the location of the two Toshiba-SanDisk joint-venture semiconductor manufacturing plants, Fab 3 and Fab 4. Both fabs were down for a short period of time due to the earthquake and were back up and operational as of Friday morning, Pacific Time.

"There were no injuries to SanDisk employees based in Japan. SanDisk's current assessment is that there has been minimal immediate impact on wafer output due to the earthquake. SanDisk continues to assess the situation for any potential future impact that may arise from issues related to Japanese infrastructure and the supply chain."

But even a relatively short break in production could hit world stocks of flash memory hard. The Toshiba-SanDisk facility in Yokkaichi is the largest manufacturer of NAND flash in the world. In December, Toshiba reported a split-second outage at the plant, which it said would hit flash production by as much as 20 per cent for up to two months. If, as is feared, Friday's power cut lasted longer than the earlier outage, it could have a huge impact on world supplies.

Continuing power shortages are expected in the aftermath of the disaster, after authorities were forced to take offline three nuclear power plants in the disaster zone.

Two explosions at the Fukushima 3 nuclear reactor have led to the leak of radioactive material, although government ministers have denied the possibility of a reactor meltdown causing "another Chernobyl" disaster.

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