The Impact of Japan's Disasters on Electronic Components
Posted by Jenny Miller on Mon, Mar 14, 2011 @ 05:14 PM
As we sit and watch the effects of the earthquake and tsunami in Japan, our thoughts and prayers are with the people and rescue efforts there. For opportunities to give towards the life-saving work being done there, we can recommend World Vision’s Japan Relief Efforts as a means of support.
In looking around the landscape we’ve searched to see how the events in Japan have impacted our specific industry of electronic components. We know that in 1993 when the Sumitomo Chemical Company in Japan was destroyed “some 60 percent of the world's high grade epoxy resin for IC plastic packages” disappeared overnight. Worldwide, suppliers scrambled to keep up and the demand for DRAM increased by 50% almost overnight, according to an article by Jack Robertson. (Click to read more of this article).
We find the same view on a much larger scale now, with electronics manufacturers virtually immobilized in the face of this tragedy. As said by Lance Whitney in “Japanese Electronics Firms Grapple With Quake’s Effects” on March 11, 2011,
“One area of the electronics supply chain that could be hit particularly hard is chips. Japan accounts for more than 20 percent of the world's semiconductor supply, according to IHS iSuppli. The firm says the major impact on Japan's semiconductor production will be disruption to the supply chain that could be revealed over the next two weeks. ‘Suppliers are likely to encounter difficulties in getting raw materials supplied and distributed and shipping products out,’ according to the report released Friday.”
[Click here to view the article in its entirety.]
Another area poised for a hit is the flash memory chip supply. In the article by Brook Crothers on news.CNET.com, she says “Over 40 percent of the world's NAND flash and roughly 15 percent of the world's DRAM are manufactured in Japan, according to a report released today by Objective Analysis, a firm that does semiconductor-related market research.” [Click here to read more].
In the below map it’s easy to see that the area effected by the earthquake and tsunami is almost entirely overlaid by electronics manufacturers. Within the next few weeks we will see to a greater extent how the electronic component industry has been hit with these natural disasters. From our view here we’ve seen an immediate demand for TDK parts and expect to see that expand to other areas quickly.
[Map courtesy of Objective Analysis]
We will endeavor to stay ahead of these trends in our small area of the world in the hopes that our efforts may help alleviate this area of need that has been generated.
