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2011 Tsunami expected to disrupt electronics production, cause jump in worldwide NAND flash prices

Factories temporarily closed from major companies, global semiconductor supply to be affected in the short term

The recent Sendai earthquake measuring about 8.9 on the Richter scale and the subsequent massive tsunami have unfortunately left its mark on some of Japan’s major electronics factories.

Sony could be one of the hardest hit tech companies, as TechEye is reporting evacuations from up to six factories in Northeastern Japan. These facilities were responsible for manufacturing laser diodes found in laptop and computer disc drives. Sony will be looking at the affects of the outages and damages before considering the next appropriate action, a company spokesperson told Business Week.

Similarly, Toshiba, Sharp, Sanyo and Panasonic have halted production in a number of factories according to ComputerWeekly. Toshiba in particular had to close down a plant responsible for making microcontrollers and its NAND Flash production factory could possibly be affected. The company supplies a major percentage of the NAND memory chips used in worldwide consumer electronics, including the Apple iPad, and LSE claims that prices for these flash chips could jump due to the impact of the tsunami.

“Japan produces around 20-25% of world silicon chip production,” says semiconductor analyst Malcolm Penn. Toshiba and SanDisk can account for half of the world’s NAND Flash assembly, a technology that is currently high in demand this year due in part by the rise of tablets and solid state drives.

Although such production disruptions and resulting market price increases have happened in the past, companies are still assessing the damage done by the Sendai earthquake on the overall electronics supply chain. Industry analysts from iSuppli predict disruption in worldwide semiconductor supplies during the next two weeks, based on preliminary assessment.

Hopefully, Japan will make a swift recovery as it continues to gain financial and personnel support from around the world. Expect more news to come as the dust clears and situation improves.


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Allen Ngo, 2011-03-13 (Update: 2012-05-26)