The massive earthquake and tsunami that struck Japan Friday could have a large impact on the global consumer electronics supply chain, though analysts said that the direct impact on components was likely to be minimal. The earthquake hit the northeastern section of Japan, far away from where many of the largest chip plants are located.
"The major impact on Japan's semiconductor production is not likely to be direct damage to production facilities, but disruption to the supply chain," research firm IHS iSuppli said in a statement. "Suppliers are likely to encounter difficulties in getting raw materials supplied and distributed and shipping products out. This is likely to cause some disruption in semiconductor supplies from Japan during the next two weeks." Foxconn technology, which manufactures devices for numerous companies, including Apple (NASDAQ:AAPL), said it expects the disaster to impact the global technology value chain, according to a report in the Financial Times.
IHS iSuppli noted that Japanese suppliers accounted for more than one-fifth of worldwide semiconductor production in 2010, and that companies based in Japan generated $63.3 billion in chip revenue in 2010, representing 20.8 percent of the global market. Still, analysts said the direct impact on semiconductor components likely wouldn't be major.
The impact will be "not as much as one might think," Forward Concepts analyst Will Strauss told FierceWireless. "The Japanese pretty much have become a smaller component of semiconductor manufacturing." China is now a major source of electronics and electronic components.
One area of concern for global handset makers could be the impact on LCD displays, iSuppli noted. "Japan accounts for a very high share of components uses in LCD panels and LCD-based products, including glass, color filters, polarizers, cold cathode fluorescent lamps and light-emitting diodes," the research firm said.
Last year, both handset and infrastructure vendors complained of shortages of key components for networking equipment and handsets, largely due to stronger-than-expected demand.
- see this IHS iSuppli release
- see this WSJ article (sub. req.)
- see this FT article (sub. req.)
- see this Dow Jones Newswires article (sub. req.)
- see this Engadget post
- see this Mashable post
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