Analysts: Japan Disaster Worst Supply Chain Impact Ever

By Freddie Pierce
Written BY: Sharise Cruz The natural disaster in Japan has caused disruption and shortages worldwide, and now, technology research firm IHS iSuppli has...

Written BY: Sharise Cruz

The natural disaster in Japan has caused disruption and shortages worldwide, and now, technology research firm IHS iSuppli has determined that the situation is “the most significant supply chain impact the [consumer electronics] industry has ever experienced.”

Analysts for IHS iSuppli determined that physical plant damage and rolling power outages caused by the wake of the magnitude-9 earthquake and tsunami have been the most significant road blocks to supply chain rehabilitation in Japan. In a webcast, IHS iSuppli Research Director Dale Ford said it will take up to two or three months for most factories to return to full production levels. According to Ford, some factories will not be fully operable for six months and others may be too damaged to ever recover.

The latest supply chain victims of the disaster are hydrogen peroxide and the silicon wafers used to produce computer chips.

CHECK OUT THE TOP STORIES FROM THE WDM CONTENT NETWORK
The Trillion Dollar Race for the Eastern Seaboard
SAP, Oracle and Accenture weigh in on Inventory Reduction
Oracle’s Top Tips for Supplier Relationship Management
The Best U.S. Trucking Companies to Work for

Japan accounts for 75 percent of the world’s hydrogen peroxide manufacturing. Nippon Peroxide, Adeka Fuji and Mitsubishi Gas and Chemical have stopped production of the material, widely used as a cleaning agent.

The country produces 60 percent of the world’s supply of silicon wafers, and the disruption in assembly could cause a shortage of about 200,000 wafers per month for two to three months.

As always, CLICK HERE to see the latest issue of Supply Chain Digital as it appears in our e-reader.

“That is a critical situation. This is rapidly turning into a very concerning issue in Japan,” said Len Jelinek, IHS iSuppli Analyst for semiconductor manufacturing. “The suspension of operations at these plants could have wide-ranging implications beyond the Japanese electronics industry.”

There’s a possibility that other countries could step up to the plate and offset the shortages in Japan. Nations like South Korea could increase silicon wafer production and fill some of the gaps in the supply and demand chain.

Share

Featured Articles

Cainiao: The World's Largest Ecommerce Logistics Provider

As Alibaba-owned Cainiao announces big Q4 2023 revenues rise, we profile the world's largest global e-commerce logistics services provider

FedEx Express Opens Singapore Logistics HQ

FedEx Express focuses on Singapore as global logistics hub - a status marked by the must-attend Procurement & Supply Chain LIVE Singapore event

Supply Chain Problems Sees Partnerships Programme Grow

Kinaxis PartnerLink programme extended in face of volatile economic and political landscape for supply chains

Bain: CEOs Leveraging Supply Chain for Competitive Edge

Digital Supply Chain

Carlsberg Targets Supply Chain in its Drive to Net Zero

Sustainability

SAP's new AI CO Herzig 'Will Drive the Tech to Next Level'

Technology