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Japanese companies halt additional factories, Lenovo concerned over supply issues

Additional closures across troubled areas begin to worry Lenovo and analysts.

As subsequent earthquakes in Japan end, the potential worldwide production and supply issues are becoming more realized, particularly for the market of LCD screens.

Reuters is reporting that a number of Japanese electronics companies, specifically Hitachi and Toshiba, are halting their respective production plants responsible for manufacturing LCDs for smartphones and other handheld devices. “…supply disruptions there could cause problems for some handset makers of some models,” claims Japanese analyst Damian Thong. This is in addition to the series of factory shutdowns as reported last week immediately following the tsunami disaster.

In response, Chief Executive Yang Yuanqing of Lenovo is expressing concerns over how the disaster will be impacting future revenues and expected supply. Component availability, such as LCDs and batteries, could soon become an issue for Lenovo. “In the short term there won’t be much impact. We are more worried about the impact in the next quarter,” says Yuanqing.

Outside of immediate tsunami and earthquake fears, the growing distress of nuclear radiation threats from breached power plants may possibly force additional closures of nearby production facilities. Many car production lines, for example, have already closed due to radiation threats.

Shares for Lenovo and Toshiba are on the decline this week as Japan continues to endure the bleak aftermath of one of the country's largest natural disasters.


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Allen Ngo, 2011-03-18 (Update: 2012-05-26)