Japan disaster to cause Summer tech shortages, higher prices

The 9.0 magnitude earthquake and subsequent tsunami that has caused widespread devastation and a nuclear emergency situation in the island nation of Japan since late last week will continue to create  manufacturing disruptions which will cause electronics product shortages and rising prices over the coming months, analysts are predicting.

Reports from many of the major Japanese tech manufacturers including Sony, Panasonic, and Toshiba, began filtering to the press shortly after the tsunami hit last week, however it is now becoming more apparent that resuming normal production operations may take several more weeks, or even months.

Japan disaster to cause Summer tech shortages, higher prices

“Earthquakes ranging from 4 to 7 on the Richter scale will make it impossible to really restart these fabs until the earthquakes stop happening with such frequency,” researcher Dale Ford of IHS iSupply told the LA Times in a statement. “Every time a quake tops 5, the equipment automatically shuts down.”

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Ford’s firm has identified five specific parts in Apple’s recently released iPad 2 that are supplied by Japanese companies and may increase already lengthy ship times for the product. The tablet is constructed with NAND flash drives from Toshiba, memory by Elpida, digital compasses from AKM Semiconductor, glass for the touch screen from Asahi Glass Co. and ultra-thin batteries that are sourced exclusively from Apple factories located in Japan.

But Apple is far from the only company that will have problems sourcing parts. Sony Ericsson has admitted that they are facing issues with supplies used to build mobile phones, and Toshiba has had to shut down one of two LCD manufacturing facilities until sensitive equipment can be recalibrated. Five of Sony’s six battery-producing plants are currently disabled causing shortages for laptop manufacturers, while Hitachi is having problems keeping its Tokyo factory online due to power cuts to conserve the nation’s energy during the crisis.

Even factories that are still able to run at full capacities are having problems due to shortages of raw materials and employees affected by the trifecta of events.

“Suppliers are expected to encounter difficulties in getting raw materials supplied and distributed as well as in shipping out products,” representatives from IHS iSuppli said “They also are facing difficulties with employee absences because of problems with the transportation system. The various challenges are being compounded by interruptions in the electricity supply, which can have a major impact on delicate processes, such as semiconductor lithography.”

And while the situation is certainly bad now, the full impact of these issues will not be known for weeks to come.

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“This will start to bite home in a few weeks’ time when the first shortages start to appear, and hit hard even further in about three months’ time when the production that isn’t being made today should have been coming online,” Malcolm Penn, CEO of research firm Future Horizon told the BBC.

If you’re going to be in the market for a new tech device soon, it might be best to get ahold of it now if you can. Prices are certain to spike across the industry when the full effects of these crises are being felt.

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