How Will the Japan Disaster Effect OEMs?
Posted on Wed, Mar 30, 2011 @ 02:30 PM
Welcome back to "Under the Hood: Tips, Trends and Resources for OEMs." While the UnØMktr likes to keep things light & fun, sometimes life takes a very serious turn. So, without further adieu, I would like to turn this issue over to our VP of Supply Chain, Mr. Al Seprinski, who will address concerns regarding the effects of the recent disaster in Japan:
The world continues to watch the results of the deadly earthquake and tsunami in Japan which has certainly become one of the most tragic set of events in recent history. Our thoughts and prayers are with the people of Japan as we are sure yours are.
As the crisis continues to unfold, there will undoubtedly be difficulties on the supply chain related to our industry. DTx is in constant contact with those sources of our supply chain that may have been affected to obtain both the short and long term impact, if any.
Although subject to change, DTx’s current understanding of the situation that we face is as follows:
- Both Custom and COTS Circuit Card Assemblies – No immediate production or supply impact as most sources of the fabrications are located in Taiwan and China. Passive components also show no signs of disruption. Intel has communicated their ESPD Server Boards will be affected due to damage at the power supply manufacturers, mainly voltage regulators that are within the power supplies. Plants are experiencing rolling blackouts, probability for shortages and price increases exist.
- Memory Suppliers – No immediate impact but we anticipate there will be possible delays in logistics and distribution during the near term. Through our Consignment Program and frequent supplier forecasting models, DTx is prepared to support all firm planned releases for our customers. Response time on supporting unplanned or new requirements may be delayed due to the severe power outages and conservation however, production capacity and pricing of memory suppliers may also be affected in the near term.
- Indirect Memory Suppliers – Near term production impact is expected in areas such as raw wafer supply. We understand that upwards of 25% of the raw Silicone wafers come from Northern Japan.
- Drives – Mobile (2.5”) and Single Platter Desktop drives are affected due to the glass and aluminum manufacturing plants being damaged. 500GB Desktop Media suppliers are experiencing rolling blackouts and power outages. Drive Motor plants were also damaged. Hitachi’s Panther line is EOL immediately. Hitachi is already communicating price increases due to shortages of supply.
- Displays – Significant impact on NEC, Sharp and Optrex. The Toshiba display plant was also damaged and lead-times are out to 40 weeks. More long term affects are expected. Stepper manufacturer was damaged. 90 day lead-times have increased to 180 days due to component shortages and rolling blackouts. AUO has communicated a concern regarding the component manufacturers and is recommending customers to prepare their inventories for expected supply chain disruptions.
- Both Custom and COTS Wire and Harness Cable Assemblies – No immediate production or supply impact as most sources of the fabrications are located in Taiwan and China.
- Embedded CPU - No immediate production or supply impact.
It is still very early in the evaluation stage of this tragic event to determine the full impact. We continue to monitor the situation closely and will provide updates as new and relevant information becomes available.