Japanese earthquake sparks component price hikes
DRAM and NAND prices rose sharply this morning as fears grow over supply shortages
Fears of a global components supply shortage intensified this morning as DRAM and NAND prices rose sharply and a spate of Japanese manufacturers announced plant suspensions.
Sony, Panasonic and Fujitsu were among those to confirm plant suspensions in the wake of the 8.9-magnitude earthquake and subsequent tsunami that devastated north-east Japan on Friday.
According to DRAMeXchange figures cited in a Wall Street Journal report, the average price of DRAM chips rose by between 5.5 per cent and 6.8 per cent this morning.
DRAM manufacturing in Japan accounts for one tenth of global supply based on wafer production, figures from analyst iSuppli suggest. Japanese DRAM supplier Elpida confirmed today that its Akita plant is currently not in operation because of the power shutdown caused by the earthquake.
Similarly, the average spot price of NAND flash memory used in smartphones and tablets rose by as much as 12.5 per cent this morning, reflecting concerns over a possible global supply shortage.
Japanese firms, most notably Toshiba, account for 35 per cent of global NAND flash production by revenue, according to iSuppli. Toshiba today closed all its premises in areas with power outages, besides its headquarters.
Even if most plants were not directly hit by the earthquake, manufacturers will be affected by transport problems and power outages, analysts warned.
"Suppliers are likely to encounter difficulties in getting raw materials supplied and distributed and shipping products out," said iSuppli. "This is likely to cause some disruption in semiconductor supplies from Japan during the next two weeks, based on the IHS iSuppli preliminary assessment of the situation."
According to iSuppli, Japan produced $216.6bn (£134.5bn) of global electronic equipment factory revenue in 2010 - nearly 14 per cent of the world's total.
Sony said today that it has suspended manufacturing operations at seven production sites, while Fujitsu announced that six of its plants across three prefectures had sustained damage.