Sony Ericsson today issued a statement that confirmed its business and supply chain would be affected by the catastrophic earthquake in Japan.
While there was no damage to the company's two Tokyo offices and all of Sony Ericsson's 1,100 employees emerged without injury, the company still warns of supply shortages in the coming months.
"The affected area in northern Japan supplies a large portion of the world's electronics industry with components, and the current situation will impact Sony Ericsson's business," read the statement.
Sony Ericsson says it is in contact with key suppliers in the region in order to plan relocation of certain component manufacturing. The company admits the full impact of the current situation on its business will take additional time to assess.
IHS iSuppli today issued updates on the impact the quake would have on semiconductor supply chains. IHS concludes that semiconductor facilities will not be able to fully resume production until the aftershocks cease.
IHS research indicates that earthquakes ranging from 4 to 7 on the Richter scale will make it impossible to fully restart the fabs until the earthquakes stop happening with such frequency. Every time a quake tops 5, the equipment automatically shuts down.
OEMS worldwide could be engaging in "panic buying" of semiconductors and electronic components spurred by fears of supply disruptions from Japan. Electronic distributors are reporting a surge in orders from OEM customers, trying to ensure they have sufficient inventory on hand to ride out any interruption in supply.
And yet, IHS concludes things could have been worse, positing that the recent buildup in global semiconductor inventory may serve to mitigate the impact of reduced supply from Japan. In February, IHS warned that global semiconductor inventory levels had risen to alarmingly high levels, surging to a two–and-a-half year high in the fourth quarter of 2010. Although not completely compensating for supply disruptions from Japan, such excessive inventories may provide some cushion for global semiconductor supply.
While Japan is a major producer of electronic systems, it is a much smaller consumer of such goods, accounting for only about 5.2 percent of global PC consumption and 5 percent of worldwide cell phone consumption in 2010, IHS iSuppli research indicates.