The devastation and loss of life continues to make the news as the people of Japan survey the damage caused by the earthquake and tsunami. We are now learning that some of the nuclear power plants in Japan could be leaking dangerous amounts of radiation and it is not clear how this danger may affect the country. What is known is that some 20% of the world’s supply of various computer chips are produced in Japan, and with dwindling supplies the cost is starting to rise. Though these price increases will be passed on to consumers in the form of higher pricing, what is unknown is what effect it will have in the production of new and existing products.
Apple sold out of its popular iPad 2 tablet computers last weekend. It is being said that the waiting list is now four weeks before you can expect delivery of a new unit. But now with the disaster in Japan looming, and the unknown availability of chips from the country, this could impact just how soon the units will actually arrive in the US. In addition, other companies such as Toshiba, Canon, and Sony have shut down their plants, and it is unknown if and when they will start up again. These companies make products that are used in a large variety of products including LCD panels and parts.
Texas Instruments, which has two major plants producing chips in Japan, has stated that its plants will be down until at least July. It is also not known how long other plants may be closed nor when they will return to production.
What could be the biggest disruption and which could also affect production of chips is the unknown effect that the nuclear plants exploding and radiation leaks will have around the country. In addition, the Japanese auto plants have ceased production of new cars, because parts distribution has also been disrupted. The entire Japanese economy is teetering with all of these unknowns and the possible ramifications that could ripple around the world.
While many of us believed that 2011 would be filled with new tablet computers from various companies challenging the Apple iPad, this may be delayed until next year or beyond. IHS iSuppli gave us some insight into the situation when it stated that a two-week supply disruption would be felt until the third quarter of this year. One can only guess that if the supply of chips went on for months at a time that this could disrupt the distribution of new devices into next year or beyond.
My prayers are with the people of Japan and I would hope you would join me.