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Japan Disaster Disrupts Supply of Crystals

EL SEGUNDO, CA — Disruptions spurred by the Japan earthquake and tsunami caused shipments of crystals to be delayed by four weeks in April compared to March, impacting the supply of a critical component employed in products including cell phones and PCs, new IHS iSuppli research indicates.

The average lead time for megahertz and kilohertz crystals rose to 12 weeks in April, up 50 percent from eight weeks in March. Lead time is the period between when a maker of an electronic product places an order for a part and when that part is actually delivered.

“Because Japan is the world’s leading producer of crystals—major suppliers include Epson, NDK and Citizen—the quake crisis will cause pricing for crystals from major Japanese suppliers to climb during the next few weeks,” said Rick Pierson, senior analyst for CPT and semiconductors at IHS. “In fact, numerous Japanese crystal products are manufactured in factories located near the epicenter of the earthquake or are situated close to the coastal regions impacted by the tsunami.”

Crystals produce an electronic signal at a very precise frequency. The frequency is used in devices called oscillators to track time, manage radios, or serve as a clock that controls the function of semiconductors. Playing a key role in products ranging from wristwatches to notebook PCs and mobile phones, crystals are produced in massive volumes, with more than 2 billion units estimated to ship every year.

Widespread damage
Among the facilities damaged in the disaster is a supplier’s location in northern Japan that produces crystals for oscillator products. Damage was also sustained by two oscillator suppliers in Fukurawa and Kanagawa, as well as at NDK, which produces crystal oscillator products in its Furukawa, Osaki-city manufacturing site. On a positive note, status reports from one leading manufacturer of quartz crystals and oscillators that are sold in cylindrical, plastic, metal and ceramic packages show production has restarted at that manufacturer’s Yamanashi, Funehiki-cho, Tamura-shi and Fukushima-ken plants. However, aftershocks and recurring disruptions to the local power grid continue to delay the resumption of normal operations. High-end filters impacted
IHS iSuppli research indicates that Japan’s production of high-end electromagnetic interference (EMI) filters also has been impacted by the disaster, delaying delivery of these parts. Such filters are used for noise suppression and are utilized in high-end electronic products, including top-of-the-line smart phones and cell phones. One supplier in Miyagi prefecture confirmed that the quake has affected a factory that manufactures wire wound filters, which will have an impact on shipments after April.

This type of pricing analysis, plus an executive summary of the market’s change and direction, is available every month to clients of Component Price Tracker (CPT). CPT is the only monthly multi-regional update of major component prices, both spot and market, on more than 300 part descriptions.

IHS iSuppli

3 comments on “Japan Disaster Disrupts Supply of Crystals

  1. hwong
    May 6, 2011

    The impact from the shortage will really depend on how well vendors can recycle old devices and the inventory level. Apple seems really good dealing with supply chain by stocking up sufficient components. The rest might also not be impacted since demand for their high-end devices might just be overshadowed by Apple's gadgets.

  2. t.alex
    May 7, 2011

    Crystal is the one of the major component that produce heartbeats for the whole system to function. Is it really true no other sources besides manufacturers in Japan?

  3. jbond
    May 9, 2011

    This is a problem that many saw coming. As the weeks continue to go by after the Japan earthquake and tsunami, manufacturers are realizing the true devastation. Many people thought only certain aspects of manufacturing would be dealt significant blows, but they are now realizing that there are many small components that have very drastic supply shortages. These shortages are going to continue to be felt for many more weeks to come.

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