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Japan Earthquake May Cause Component Shortages Says iSuppli

Industry analysts IHS iSuppli has issued a warning to the tech community saying that the earthquake that hit Japan and the subsequent Tsunami that affected large areas of the country could result in "significant" shortages of particular types of electronic components.

This could trigger massive price rises and have ripple effects across the whole industry, seriously hampering the momentum gained by the tech segment over the year or so.

Components likely to be affected include NAND flash memory, DRAM, microcontroller parts, logic chips, LCD panels, Plasma screen and many other less significant ones.

Japan produces nearly two thirds of the world's silicon based components which means that any disruption is likely to have an impact down the supply chain in Asia and elsewhere.

Two big component manufacturers in Japan, Toshiba, Hitachi and Fujitsu, have issued official statements saying that they have had to alter their activities following the aftermath of the earthquake.

Planned power cuts have also severely affected production because of the fate of the nuclear reactors hit by the quake on Friday.

iSuppli said that the global supply chain "has about two weeks of excess component inventory in the pipeline for semiconductor parts affected by the quake", after which shortages are going to impact on the market.

Spot and contract prices as reported on the main transaction websites have gone up significantly as clients try to secure inventory on the market ahead of what could be a make-or-break year for many.

Désiré Athow
Désiré Athow

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at ITProPortal.com where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.