It's been over a week since a major earthquake and tsunami devastated parts of northeastern Japan, and more information is becoming available about the status of electronics components manufacturers and other supply chain players.
- In the short term, manufacturers' ability to produce components is affected by several conditions: site damage caused by the earthquake or tsunami; power outages; and logistics and communications challenges created by the priority given to humanitarian relief.
- Longer term challenges to manufacturers' ability to deliver product may arise from a scarcity of materials from primary supply sources, such as silicon wafer or BT resin producers affected by the earthquake.
- Comparisons to current supply chain disruptions are being drawn to the 1997 brake valve supply disruption for Toyota. (See New York Times article below). In that case, Toyota and its suppliers demonstrated remarkable resiliency by quickly designing and building alternative production facilities and averting major production disruption.
- At Smith, we believe this historical perspective suggests strategies we'll see from some of the affected major components manufacturers (see the Rohm status update below.) But the number and diversity of manufacturers affected by these recent events make this scenario more challenging and less likely as an across-the-board solution.