Analyst iSuppli highlights looming crunch, price hikes in memories, LCDs and other products.
The earthquake and tsunami in Japan could result in “significant shortages of certain electronic components, potentially causing pricing for these devices to increase dramatically,” according to an updated analysis from analysts at IHS iSuppli.
In a note issued on Monday (March 14), the company said, “While there are few reports of actual damage at electronic production facilities, impacts on the transportation and power infrastructure will result in disruptions resulting in short supply and rising prices.”
Commodity markets have already reacted sharply. The spot market price for NAND flash memories has risen by 10 per cent and that for DRAMs by 7 per cent. Other chip markets likely to be impacted include microcontrollers and standard logic, as well as LCD panels, parts and materials.
Japan is also the world’s largest supplier of the silicon used to make semiconductor chips, with a market share of about 60 per cent.
The iSuppli update said that, globally, there are two weeks of excess component inventory for semiconductors affected by the disaster. “Because of this, the shortages are not likely to appear until the end of March or the start of April,” it added. “These shortages and their price impact are likely to linger until the third quarter.”
Most Japanese semiconductor manufacturing is located in the south of the country, away from the earthquake’s epicenter. But companies are already being hit by rolling power cuts and difficulties in sourcing raw materials.
One of several exceptions is a Hitachi LCD display fab comparatively near to the earthquake zone. It halted production on Monday. Among its customers, it supplies displays for such high volume products as the Nintendo DS and LG handsets. The 3D version of the DS is due to launch in the UK in less than two weeks.
Another display fab neighbouring the epicentre is owned by Panasonic, and provides LCDs for its own products and some produced by Chinese companies.
“Preliminary information shows that most production of components in Japan for use in large LCDs such as glass, color filters and polarisers were not impacted,” iSupply said, although output here could also by hit as utilities struggle to restore the national energy infrastructure.