Japan's Situation May Impact Technology Supply Chains

By Joe Purcell
Expert Author
Article Date: 2011-05-20

It appears that, at least in the technology world, supply chains will be affected due to the recent tragic earthquake in Japan. In an article exploring the impact it will have on Apple it is stated that "[o]ver 40 percent of the world's NAND flash and roughly 15 percent of the world's DRAM are manufactured in Japan." In this instance, and with others, companies with the size and resources of Apple will likely be able to evade supply shortages. However, small players, and some big players, may experience critical supply issues.

As the previous article mentions, Apple will likely be affected little by alterations in supply because it is a top buyer. Likewise, Boeing will avoid serious issues "due to its large size and financial resources." Nonetheless, significant disruptions have taken place.

A key producer of a resin used in semiconductors was damaged. The problem is that this resin isn't at the top of the supply chain, it's at the very bottom of a long chain of technology products, all of which are in high demand. NAND flash memory has already increased 10 percent.

The impact these disruptions are having on companies is to be noted. The Lexmark printing company has been affected which this article comments on the situation well saying, "the fact that the disaster is affecting Lexmark at all is indicative of how disruptive the earthquake in Japan may prove to be to the supply chain for imaging hardware and supplies." The long term impact these disruptions will have in the technology supply chains has yet to be determined.

The same article mentioned earlier provides a good way to check to see if a supply chain may be affected. Natural disasters have perpetually echoed the need for contingency plans, especially for multinationals. The event in Japan is testing the risk mitigation procedures of supply chains and only time will tell how well they will hold.

About the Author:
Joe Purcell is a technology virtuoso, cyberspace frontiersman, and connoisseur of Linux, Mac, and Windows alike.

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