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IHS iSuppli also reported that global semiconductor inventory levels in Q4 of last year reached a two-and-a-half year high, which it says will lessen whatever impact supply disruption in Japan has on the industry.
In fact, there’s some speculation that certain players within the industry could see benefit as others struggle. “I do not see any immediate impact [from the earthquake],” said John Convery, executive vice president of vendor relations for Redmond, Wash.-based Denali Advanced Integration. “I see vendors like HP having tremendous supply chain CLOUT because of their scale and buying POWER to secure common components across their entire portfolio from the Client to the Data Center to the Printer. HP has a major competitive advantage here.”
The same cannot be said for most component makers. China-based manufacturer Lenovo, whose extended-life batteries are made in Japan, is concerned about shortages, as Lenovo CEO Yang Yuanqing confirmed on Thursday at a conference in Shanghai. “In the short term there won’t be much impact. We are more worried about the impact in the next quarter,” Yang reportedly said.
According to a Reuters report on Thursday, Toshiba after the earthquake closed its crystal display product facility in Japan for one month. Meanwhile, its competitor Hitachi also said production of small form factor LCDs at its Japan-based facility has been suspended, as a result of ensuing damage and power outage. Various other fabrication plants have temporarily shut down.
As prolonged disruption to production and regular business operation fuel concerns over supply, IT industry share prices have gone down and uncertainty is on the rise. “We haven’t gotten any notices, any confirmations, or been informed of any delivery delays,” said Skip Carruth, president of Temple, Texas-based McLane Intelligent Solutions. “We purchase product and resell it on demand so we have a secondary impact, as we’re dependent on the supply channel to anticipate demand and make preparations. Any of our customers with equipment on order that haven’t received it yet has been given notice that we don’t know if the situation in Japan is going to impact future shipments.”
According to IHS iSuppli, the aftermath of the earthquake also includes shortages in the supply of Apple’s new iPad 2 device, as its electronic compass and battery are built in Japan, as are other iPad components. However, given how recently Apple’s iPad 2 was released and given high sales forecasts from analysts such as Gartner, supply may not be as much of a concern for Apple distributors as demand. “We have no information from Apple,” Michael Oh, President of Boston-based Apple reseller Tech Superpowers said. “As far as what we in the channel know, Apple’s iPad 2 availability is primarily being driven by huge demand rather than supply-side restraints at this time. That’s not to say it couldn’t happen theoretically, depending on how tight Apple’s supply chain is, but at this point we have no idea.”
Oh added that the popularity of iPad 2, along with the great number of Apple distribution channels, is itself fueling a large amount of uncertainty. He said Apple is traditionally a company that does not describe uncertainty, but will instead simply say if the timeframes have moved or not, while making sure it has all necessary components pre-ordered in quantity.
According to IHS iSuppli, the iPad 2 includes at least five components from suppliers in Japan: Toshiba’s NAND flash, Elpida’s DRAM, AKM’S electronic compass, as well as a system battery built by its own subsidiary in Japan and a touch-screen glass overlay from Asahi Glass.
Next: Impact On The Workforce in Japan