Supply chain problems won’t be restricted to high-end smartphones and tablets, however. Earlier this week Epson revealed its Toyocom Fukushima plant, which produces crystal sensors for several brand-name mobile devices, is temporarily shut down. The site’s future is in doubt because it is 16km from the Fukushima nuclear power station where authorities are battling to prevent a meltdown.
Vendors face up to Japan shortages
A components shortage caused by the devastating Japanese earthquake and tsunami now looks certain to impact shipments of forthcoming smartphones and tablet PCs.
Apple’s iPad2 is one of the biggest-name products in the firing line, with a rare electronic compass and the battery among several components sourced from Japan, according to a teardown by IHS iSuppli.
The research firm notes the tablet PC also uses NAND flash memory from Toshiba, DRAM from Elpida Memory, and a Touchscreen overlay from Asahi Glass. Although not all of the suppliers have suffered damage to production plants, iSuppli notes that simple logistical problems resulting from the devastation will hit their ability to ship products, while powerful aftershocks stymie attempts to restart production.
“Every time a quake tops five [on the Richter scale], the equipment automatically shuts down,” IHS staffer Dale Ford points out.
Sony Ericsson is in talks with suppliers over moving production to other locations to cover an expected components shortage. The vendor is also sourcing secondary supplies as it anticipates supply chain disruptions.
However the firm, which is gearing up to ship its hotly-anticipated Xperia Play smartphone, states its too early to assess the full impact of the shortages on its business.
Co-parent Ericsson has already issued a similar statement regarding the impact on its business, but said the effects of any shortages won’t impact 1Q sales. The firm is redirecting component orders to other suppliers and is making spot market purchases where necessary.
Earl Lum, head of telecom gear and component research firm EJL Wireless told Reuters he expects supply chains to be impacted for the remainder of 1Q and into 2Q, noting the industry had already been operating ‘near capacity’ before the crisis.