In the immediate aftermath of the disastrous earthquake and tsunami which hit Japan recently, spot prices of certain semiconductors have started soaring on fears of shortages caused by supply disrupti…
In the immediate aftermath of the disastrous earthquake and tsunami which hit Japan recently, spot prices of certain semiconductors have started soaring on fears of shortages caused by supply disruptions of certain components from Japan. At the same time, prices of NAND flash chips used in smartphones, cameras and a range of other electronics have increased 20%, according electronics research firm iSuppli. While there are few reports of actual damage at electronics production facilities, impacts on the transportation and power infrastructure will cause disruptions of supply, resulting in the short supply and rising prices, it said. Japanese suppliers have a dominant position in core high-end parts such as passive components, glass for flat panels and, most importantly, the silicon wafers that chips are made from, all used in technology products. There are, however, alternative sources in Taiwan and South Korea for passive components and glass, which should ensure that all top-tier manufacturers of panels or handsets can get supplies. However, with regards to silicon wafers, a product for which Japanese companies hold a 60% global market share and which is mostly made in factories in Japan, things are more serious. There are no reports of silicon wafer factories having been hit or destroyed in the quake and subsequent tsunami, but the threat of rolling power blackouts will keep those factories switched off. Since each silicon wafer takes more than three weeks to make from start to finish, if the line stops during that process, the product is wasted.