iSuppli, in particular, has issued three separate press releases in the past week regarding the issue, one about the iPad 2 specifically, one about delays in components in general, and one about the industry’s dependence on Japanese-made components. For example, “Japanese companies, mainly Toshiba Corp., account for 35 percent of global NAND flash production in terms of revenue,” the company said.
Reuters quoted DRAMeXchange as saying that spot prices of NAND flash chips increased on Tuesday by nearly 3 percent after a 20 percent jump on Monday.
Micron, based in my home state of Idaho, stands to gain, according to several analysts quoted in an article by Matt Phillips in the Wall Street Journal. While Micron, too, has manufacturing facilities in Japan (despite what Raymond James chip analyst Hans Mosesmann was quoted as saying in Barron’s), they were located in south central Japan and were undamaged, according to an article by Anne Wallace Allen in the Idaho Business Review.
However, even undamaged facilities might take time to start up again, iSuppli warned. “While some of these suppliers reported that their facilities were undamaged, delivery of components from all of these companies is likely to be impacted at least to some degree by logistical issues now plaguing most Japanese industries in the quake zone. Suppliers are expected to encounter difficulties in getting raw materials supplied and distributed as well as in shipping out products. They also are facing difficulties with employee absences because of problems with the transportation system. The various challenges are being compounded by interruptions in the electricity supply, which can have a major impact on delicate processes, such as semiconductor lithography.” Aftershocks are also a factor, the organization warned.
iSuppli also noted that actual shortages aren’t likely to hit until later in the month or April, because there is typically a two-week inventory in the supply chain. However, prices are already going up due to the “psychological effect” of the earthquake, the company said.
While Japan is no stranger to earthquakes, the power of this one dwarfed previous quakes, said Jim Handy of Objective Analysis in a report on March 11. “The Taiwan earthquake in 1999 that caused significant damage in Taipei and stopped fabs in Hsin Chu was a magnitude 7.6, less than one tenth the power of Japan’s earthquake. The 1989 Loma Prieta earthquake that stopped production in Silicon Valley measured 6.9, or one hundredth the strength of today’s earthquake. Prior Japan earthquakes that have caused concerns to the semiconductor industry have been far smaller than today’s, including a 5.9 magnitude earthquake in September 2008, two measuring 6.0 and 6.8 in July 2007, and one measuring 6.9 in March of 2007.”
Handy also updated the company’s mondo chip map to reflect information it had learned from the various manufacturers since the earthquake.
Earthquakes can have multiple effects on fabrications plants, Handy said in an earlier report on a 2007 Japanese quake. “Typically an earthquake will disrupt the processing of any wafers that are on a photolithographic tool at the time that the earthquake struck,” he said. “Although a very large earthquake in close proximity to a fab can cause physical damage to the structure that is greater than the damage the building is designed to sustain, most fabs are designed to accommodate the kind of earthquake that is typical to the area. Fabs are built on a special floating floors that isolate the internal equipment from external vibration ranging from tiny earth tremors or vibrations from a passing truck to minor earthquakes. Greater earthquakes may not cause damage but their vibrations can result in incidental damage to the products being processed.
“If there is a power loss, no matter how brief, wafers in a high-temperature process may have to be scrapped,” Handy continued. “If the power loss lasts 20-30 minutes or longer there may also be a period of unexpected downtime as furnaces are brought back to a stable temperature. Another possible difficulty would be possible breaches in the clean environment. Earthquake damage may even require recalibration and further losses of work in progress (WIP) than are spelled out here. Losses could run into multiple days, stopping product flow for a week or more.”
Ironically, typically flash memory chips are cheaper this time of year, according to PCB Design 007. However, due to the earthquake, as well as to increased demand for iPads, that may be different this year, the website said.]]>
Think about it. How many places are really safe from natural disasters? We’ve already seen how the Icelandic volcano shut down flights all over Europe. The Bay Area, Seattle, and Portland are all geologically active; many parts of the Southeast are vulnerable to hurricanes; the central U.S. is prone to tornadoes. In addition to earthquakes and volcanoes in the Asia Pacific area, the region is also subject to typhoons.
It’s easy to think that having a backup or replication system in place is enough, but after watching the widespread devastation in Japan, it’s clear that we need to be thinking about how to scale up our ideas of what kind of disaster we’re planning for.
1. Where are your backups, replicated servers, etc. located? Same building? Same city? Same state? If you didn’t realize it before, it’s clear now that a disaster can cover a massive distance and that backups need to be geographically dispersed, perhaps through the cloud. Also, even if you’re using the cloud, where is the data center actually located? If it’s someplace subject to natural disasters, such as earthquake- and wildfire-prone areas in California, it may not help you much. I know some companies that choose to have their backup sites located near Spokane, Wash., because it’s geologically boring.
2. And while you’re at it, how well is your company set up for remote employees? If employees are evacuated, is there a way they can work from where they are? Can employees in other parts of the world pick up the slack?
3. How well is your site and your backup site set up for emergency power? A big part of the problem with the Japanese nuclear reactors was that they didn’t plan for an extended power outage. While there were batteries to operate the cooling system, they lasted only a few hours. Some colocation facilities keep diesel fuel on hand to run generators; does yours? How long will it last?
4. The good news — and there is some — is that the Internet reportedly held up remarkably well. Renesys, which has performed some interesting analyses of Internet shutdowns in Libya, has observed that much of the country’s Internet traffic was unchanged. “It’s clear that Internet connectivity has survived this event better than anyone would have expected,” the company wrote in its blog. “The engineers who built Japan’s Internet created a dense web of domestic and international connectivity that is among the richest and most diverse on earth, as befits a critical gateway for global connectivity in and out of East Asia. At this point, it looks like their work may have allowed the Internet to do what it does best: route around catastrophic damage and keep the packets flowing, despite terrible chaos and uncertainty.”
Consequently, communication with people outside the disaster zone has been better than after some natural disasters, with many people able to check in with loved ones fairly quickly, using social media such as Facebook and Twitter.
So think about your plan. Meanwhile, there are many ways to follow the developing situation in Japan, and to help victims in the ravaged country. Google, in particular, has collected a list of resources to keep informed about what’s happening. It could just as easily have been any of us, so think about how you can help.]]>