Well prepared supply-chains, like Apple, have hedged their sources and will do well. It is very hard to refrain from saying, “I told you so” when looking at the failure to set up second sources, alternate manufacturing sites.

VentureOutsource.com polled readers with one optional question about the crisis in Japan, and its impact on the electronics industry, placed at the end of our recent survey; ‘Q2 Electronics Supply Chain Business Outlook Survey’ which closed May 1, 2010. (Full survey findings soon to be published on VentureOutsource.com)

Readers responding to the question indicated they work for one of the following company types:

• Electronics OEM
• EMS/ODM
• Components Mfg., such as PCB, Enclosures (non-semi, non-OEM)
• Semiconductor Firm
• Electronics Equipment Mfg. / Supplier
• Distribution / Logistics Company

While hundreds of site users responded to our 16-question survey, below is a sampling of just some of the (unedited) responses to the particular poll question regarding Japan:

What are your thoughts on the crisis in Japan as it relates to the electronics industry?

• We have a long road ahead and EVERYONE needs to work together.
• It should affect consumer & auto verticals than other verticals.
• The industry so far hasn’t become aware of the significance of materials that will be short in supply in the very near future. The extremism in Supply Chian Management has led to the fact that almost no buffers are left. Long-distance ‘penny-pinching’ backfires now as local sources hardly are left.
• could cause significant problems when we are experiencing an increase in order intake
• It has had an effect, and will continue to have an affect on the Electronic Component Industry through most of this year. Companies are trying to protect their products by continuing to increase inventory to cover their assembly requirements until the situation stablizes.
• There seems to be a lot of panic buying and is affecting availability and lead time
• ouch. this will effect every country, not just Japan.
• Parts were hard to get before the quake–It can only get worse.
• Parts brokers now making a killing. Long term, no effect. Supply chains are more diverse than ever. Japanese industry will see a one time major permanent decline in total electronic components output.
• Only time will tell how the industry adapts to the loss of Japanese products and input. And how long will the world take to make the adjustments.
• It is very hard to refrain from saying, “I told you so” when looking at the failure to set up second sources, alternate manufacturing sites, etc. “Lean” can also imply that there are no reserves to tide one over during a bad time – but the bean counter mentality has usurped planning functions.
• Impact on the Components stand point, other suppliers are taking initiatives to smap their production places. Japan may leave the place for South Korea and China for those components distribution/production.
• It has had a serious impact on our business. We purchase parts from the area hit. We have had to scramble to find alternative suppliers.
• I believe that it will cause major problems in getting items that are only made in Japan. There have already been delays of 4 to 10 weeks on some items at best guess.
• Not a good thing Globally as it will impact the electronics industry.
• Difficult but manageable.
• The impact will be felt 12-16 weeks from now not today. When silicon has to come off manufacturing lines, that is when we will see the impact of this problem and will stay with us for up to the end of this year.
• Figure out ways to provide yourselves with alternate design solutions, as if you put the hard effort up front, the rewards of not getting shut down will happen in 16 weeks.
• There will be a general slow down. But as many manufacturing units are outside Japan, the loss in production in Japan can be reasonably compensated in about a years time
• It going to have a huge negative effect on the electronics industry
• effect may stretch only for about less than a year on the supply chain
• A great deal of unknowns. Not sure how and when it will effect the supply of electronic components.
• Sad and frighting. this will raise prices and slow down PC sales at a time when we need lower sales prices and higher volumes
• I don’t think we know the long term effect.
• little impact on our equipment
• Affects supply chain worldwide
• I have no direct knowledge but expect that there will be significant supply chain problems on some electronic components.
• Short term product shortages resulting in price increases due to limited availability.
• short term glitch in the supply chain which may or may not force the industry to develope secondary or third source since the market is really not that demanding.
• 1.) expecting longer leadtime for components both from Japan and from Asia. 2.) The above will bring to price increase. 3.) Together with the problem in middle east, expect the economy will drop.
• Crises in Japan will slow down the manufacturing units inside. But as many manufacturing facilities are outsourced, taken as a whole, the output may not be affected much
• Feel sorry for the Japanese people, but also afraid that the crisis will cause difficulties for our industry.
• Deliveries of some critical electronics components will for a while be delayed/unstable and prices will increase due to production limitations compared to the global demand. It might even further – as an EMS – be a logistics challenge to plan production for the coming 6-12 months.
• will be critical
• Losts of negative stories on supply chain
• I don’t think impact will be drastic
• I am concerned over long term price and availability due to BT resin, quartz and timing devices and silicon wafers
• supply beyond 6 months from now is unclear
• Availability of some materials and components may be limited for a while, and prices may increase as a result, but I don’t think the impact will be significant after this year.
• As japan has quite a few manufacturing facilities outside their country, the supply as such will not be affected much.
• those advanced semiconductors (highly integrated, miniature size, special material) electronic components are affected most, not only Japanese brand but also US brand like Tyco, TI, Molex, Freescale…and raw material are the concerns.
• Over reacting
• short term negative impact but with re-construction works over time it will bring forth positive effect.
• To early to tell, but it won’t be good
• Near term disruptions in supply; likely allocation and price increases
• We see now the negative side effects of the globalization besides the human tragedies happened and still ongoing due to the massive earthquake and its results.
• Create a higher demand for other suppliers, then increase prices. May have a long term impact on the Japanese suppliers.
• Ouch!
• Very concerned with supply of components especially in Q3 and Q4
• I think the industry is diverse enough that there will be only minor disruptions to the supply chain.
• It has created either a slow down or halt to some key components in our supply chain. This is more dramatic because it has been spread out over several customers causing some work stoppages and searches for alternative suppliers.
• some delays at first but we expect they will rebound by 2nd quarter
• Japanese products and components will go higher in price. Japanese products and components will not meet demand.
• Major impact on the Japan domestic market consumption, with a knock-on effect on companies with a large exposure to Japanese consumption. Lessening impact in supply chain over time.
• The direct short-term impact has been near zero, the real impact do not forsee becoming visible until 2 months post disaster, then we believe the real impact will start to surface, and we can start to examine business effect. In brief too early too tell……
• Well prepared supply-chains, like Apple, have hedged their sources and will do well.
• drastically impedes semiconductor materials and component availability for goods using semiconductors and chip sets in the intermediate term, but provides opportunities for non-Japanese foundries.
• Wait and see mode right now
• China will take up the slack—- I do not see a problem in that regard in the future
• Expect impacts to pricing and availability negative impacts to assembly firms.
• I expect some trailing shortages and tightening of supply the longer the disruption persists.
• I prefer to keep this to myself: our company has carried out extensive work on this tragic affair, & we have kept our lines & those of our customers running.
• It has caused materials delay and consequently the need to quickly find alternate supply of critical components
• The impact to my company is minimum as we do not use a lot of Japanese products. Besides, we do not have Japanese customers. The only impact is from the American products which are manufactured in Japan and the leadtime has stretched considerably.
• I understand that the chip manufacturing was a core component in controlling the product optimisation. The current crises will lead to price rise in electronics for next 2 – 3 years.
• It will have impacts that will last for about 8 – 12 months.
• the japanese are very Innovative thinkers. They will definitely work their way out of this crisis

What are your thoughts on the crisis in Japan as it relates to the electronics industry? Share your thoughts below.

Get list of EMS manufacturers for your requirements (Its free)

Save time and money. Find quality EMS manufacturers. Fast. Venture Outsource has a massive, global database of contract electronic design and manufacturing capabilities. Speak with a Provider Advisor.

“Was able to very quickly find details on the important elements of setting up EMS and ODM partnerships, talked with an advisor for personalized info on quality providers matching our requirements while getting up to speed quickly about the industry and connect with key staff from like-minded companies and potential partners. Great resource.”

— Jeff Treuhaft, Sr. Vice President, Fusion-IO

Advisors tell you matches we find for your needs, answer your questions and, can share EMS industry knowledge specific to your industries and markets.

Talk to an Advisor