Japan quake and the semiconductor supply chain

The infrastructure (transport, power etc.) disruption has indeed caused problems to the supply chain. The effect is not so immediate due to the inventory stock available with most customers. People here in Singapore while worried do not generally anticipate much problem in the semicon supply chain. Most of the companies here have enough inventory to last at least the next one to two months. In the meantime, they are exploring how to diversify their supply chain as well. Japan has however, is still experiencing aftershocks.

Having said that, I think that it will be the electronics supply chain (as compared to the semiconductor one) which will be more impacted. Japan is a big player in consumer electronics but not necessarily in semiconductors. (It accounted for 13.9$% of 2010’s global electronic equipment revenue and 16.5% of consumer electronics). Plus other than a TI fab, most others escaped damage.

But as Japan is the world’s largest supplier of silicon, raw wafer inventory will soon get depleted.
The infrastructure disruption is likely to cause short supply and higher ASPs (analysts foresee higher than expected global semicon revenue).  Affected parts are likely to include NAND flash, DRAM, microc, LCD panels and parts.

In fact on the electronics supply chain (a smooth semicon chain will not be of much help with a disrupted electronic one!), there was a recent interesting article in WSJ reporting a possible delay in iPod production because of the shuttering of a polymer (called PVDF and being used as a binder in batteries) manufacturing facility, owned by Kureha (it holds 70% of the PVDF market)., near the Japanese earthquake’s epicenter.  Reminds me of the old adage – for want of a nail, the battle was lost…

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