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Japan's Nuclear Legacy could be runner-up to Japanese Economic Collapse Effects!

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Author Topic: Japan's Nuclear Legacy could be runner-up to Japanese Economic Collapse Effects!  (Read 612 times)
Jonnie Goodboy
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« on: April 01, 2011, 08:21:15 am »

The Japanese earthquake and tsunami has not had the catastrophic impact on the electronic components industry as was first feared. However, there have been significant implications for the supply of certain components, such as NAND flash memory chips, after the closure of factories close to the Sendai region, transport disruption and electricity shortages reduced productivity. There will be short-term difficulties for many manufacturing industries, according to the Cambridge Judge Business School. Problems are to be expected across the automotive, electronics and aerospace sectors in the coming weeks, but in the medium to long-term business will return to something approaching normality. Shares of businesses which manufacture processors, memory and other types of semiconductors have also slipped.

And so now to the Prophet Motive.



The impact of the Japanese earthquake has been felt most keenly in the supply of NAND flash memory chips. Toshiba and SanDisk’s NAND fabrication factory in Yokkaichi, about 600 miles south of the worst hit region, produces around 35% of the world’s total supply of these kind of electronic components.

It is likely that the original earthquake, the continuing tremors and the persistent power outages will have affected Toshiba’s ability to supply customers. NAND flash memory is the data storage solution in iPads, iPods and iPhones, and Apple is likely to be the customer given priority when it comes to order fulfilment.

However, there were shortages in the supply of NAND before the disaster, so there is expected to be significant turbulence in the market as manufacturers relocate production. NAND trade prices rose sharply in the days immediately after the earthquake and look certain to continue on this path. The investment bankers JP Morgan have estimated that NAND output will fall by 30% over the next two months.

A note from the bank’s analysts commented: “The NAND market will likely remain supply-constrained for several months, and contract prices will likely continue to rise in the near term (spot prices are up 15% since the earthquake).”

A number of companies based in the east of the country have been forced to close facilities or suspend production because of power shortages. They include Renesas Electronics, Toshiba, Fujitsu and Rohm. Plants in Miho and Aizu owned by Texas Instruments were damaged, as were the Murata sites in Kanazawa and Tome near Sendai, the worst affected city.


The aftermath of Japan's earthquake and resulting tsunami will see short-term disruptions for many manufacturing industries, the Cambridge Judge Business School has noted.

Dr Matthias Holweg said problems are to be expected across the automotive, electronics and aerospace sectors in the coming weeks, but in the medium to long-term "we will get back to normality".

"I think we may see some shifting, probably in the medium term, of volume from Japan, should the Japanese supply chain not be able to recover," he commented.

However, he added: "One argument you could bring forward is to say that, if manufacturing faces a hard time in Japan, and of course Japan is a great exporter of vehicles, is that other manufacturing plants around the world will pick up the demand that was normally satisfied by export from Japan."

His comments come after several reports highlighted concerns that the natural disaster will affect the semiconductor industry's supply chain.

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"When the righteous become many, the people rejoice; but when anyone wicked bears rule, the people sigh".
— Prov 29:2

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