Skip to main content

Intel: Japan Crisis Won't Hurt Chip Production

Both Intel and Qualcomm have announced that the current crisis in Japan will not disrupt processor production, as their operations are spread out enough geographically that the ongoing situation won't cause any foreseeable problems.

The news counters previous comments by analysts at Barclays Plc and UBS AG who speculated that shutdowns at Mitsubishi Gas Co would deprive various chipmakers of a much-needed chemical resin (Bismaleimide Triazine, or BT) used in the packaging process, thus causing a disruption in supply.

Currently Japanese producers of some key components and materials used in the electronics sector have no power following the 9.0-magnitude earthquake and the resulting tsunami that crashed onto the island nation on March 11, damaging factories and the transportation infrastructure. Japan is also dealing with damage to some of its nuclear power plants and the growing threat of radiation poisoning. Nearly half a million people are homeless at this point.

Qualcomm, at least, seems to have production under control. "Qualcomm has multiple, geographically diverse sources for supply as well as production processes specifically designed to enable us to mitigate disruptions in our supply chain," the San Diego-based company said in a statement. "We do not foresee any significant impact in our ability to supply product to our customers due to the events in Japan."

The company also added that it will make use of buffer stock and make adjustments to the near-term material mix in case the flow of BT is indeed disrupted. Meanwhile, Qualcomm stocks have fallen $2.50, or 4.7-percent, to $50.50 as of 4pm New York time in Nasdaq Stock Market trading on March 16. Intel stocks also suffered, falling 37 cents, or 1.9-percent, to $19.81.

Chuck Mulloy, a spokesperson for Intel, told Bloomberg that the company plans to keep its commitment to customers. "Our general rule is that nothing is sole-sourced," he said.

Analysts are already indicating that prices across the entire electronics sector may increase due to the disaster in Japan and the resulting ripple of economical disruption reaching out to Taiwan. Both nations supply a large amount of the world's semiconductors, NAND flash memory, DRAM parts and other computer components.

"While there are few reports of actual damage at electronic production facilities, impacts on the transportation and power infrastructure will result in disruptions of supply, resulting in the short supply and rising prices," analysts with IHS iSuppli said in a report March 14. "Components impacted will include NAND flash memory, dynamic random access memory (DRAM), microcontrollers, standard logic, liquid-crystal display (LCD) panels, and LCD parts and materials."

Market research firm Objective Analysis is expecting "phenomenal price swings and large near-term shortages" due to the aftermath of last week's earthquake.

  • abswindows7
    Japanese don't like FPS but they still managed to rate Quake 8.9/10
    Reply
  • joytech22
    abswindows7Japanese don't like FPS but they still managed to rate Quake 8.9/10
    Haha! I get that, but at the same time I feel bad about laughing about it..
    Reply
  • Haserath
    abswindows7Japanese don't like FPS but they still managed to rate Quake 8.9/10Might want to be careful with the jokes. Someone here might have lost somebody in this catastrophe.
    Reply
  • shak2300
    HaserathMight want to be careful with the jokes. Someone here might have lost somebody in this catastrophe.
    i agree with you there +1
    Reply
  • dormantreign
    Japanese don't like FPS but they still managed to rate Quake 8.9/10

    I laughed as well. But your also right with the someone could have lost someone, It was a great joke all the same.
    Reply
  • m0j0j0j0
    how about bringing some intel plants over to the USA!! we could use an economic boost, some job openings... c'mon
    i'd apply if intel was hiring here in michigan !
    Reply
  • eklipz330
    abswindows7Japanese don't like FPS but they still managed to rate Quake 8.9/10i would have laughed but japanese authority have reevaluated the quake to be a 9 =
    Reply
  • fullofzen
    I'm less concerned about chip shortfalls (the production of which Intel claims seems dispersed) than I am about capacitor shortfalls. The cougar point recall has left motherboards in short supply on its own; I'd look to a hold in the production of the high-quality caps produced in Japan to make P67 boards even more precious than they are now, reducing the potential for price drops over the next few months...

    They're talking about power outages in Tokyo -- complete black outs. This is a huge problem that doesn't sound like it's solved easily. We're talking about one or two plants that are being completely wrecked by the use of corrosive seawater as coolant. You don't replace that kind of capacity over night.

    In other words, what radiation might not do -- power shortages will.
    Reply
  • wild9
    You know what. My immediate concern is not chip production, but rather what's what's being done to help the Japanese victims who've just had their world turned upside down. As if an earthquake and tsunami wasn't enough, they're now facing the threat of nuclear catastrophe.

    Intel, what humanitarian assistance are you offering?

    http://www.jrc.or.jp/english/index.html
    http://www.redcross.org.uk/Donate-Now/Make-a-single-donation/Japan-Tsunami-Appeal
    http://www.redcross.org/
    Reply
  • xambron
    wild9You know what. My immediate concern is not chip production, but rather what's what's being done to help the Japanese victims who've just had their world turned upside down. As if an earthquake and tsunami wasn't enough, they're now facing the threat of nuclear catastrophe.Intel, what humanitarian assistance are you offering?http://www.jrc.or.jp/english/index.htmlhttp://www.redcross.org.uk/Donate- ami-Appealhttp://www.redcross.org/Yeah, I'm in America and I could less about chip production. My i7 920 is suiting me fine, let's help those who can't even use a processor right now.
    Reply