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Japan quake pushes chip prices higher

Global manufacturing chain disrupted
Last week’s tragic earthquake off Japan’s eastern seabord is expected to have lasting effects on the global chip manufacturing chain, resulting in higher prices.

According to Reuters, dozens of Japanese manufacturers are struggling to cope with the damage and many plants are still offline. While damage to some plants might appear to be superficial, clean rooms and other high tech facilities simply cannot be designed to cope with such violent events. In addition to damage inflicted to companies themselves, the quake has also caused extensive damage to the country’s infrastructure, everything from roads and railways, to Japan’s battered power grid.

iSuppli believes the aftermath of the quake will be felt for months, particularly in NAND and DRAM markets. Although there were few reports of actual damage to production facilities, iSuppli believes the disruption caused by infrastructural damage will result in short supply and big price hikes. Even a two-week disruption to shipment schedules would continue to impact prices until Q3.

Japan is home to about one-fifth of the world’s semiconductor plants and it churns out about 40 percent of the world’s flash memory.

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