Supply concerns grow as Japan lacks parts, power, people
Friday March 18 2011 | 04:35 AM

Several parts of the new version of the popular iPad tablet PC come from Japan, including the battery and the flash memory used to store music and video on the device.

"Logistical disruptions may mean Apple could have difficulties obtaining this battery, and it may not be able to secure supply from an external, non-Japanese source," iSuppli said.

Toshiba Corp , one of the companies that produces the NAND flash memory used in the iPad 2, according to IHS iSuppli's research, had briefly shut a flash memory facility in Japan, and warned it could face problems getting raw materials.

Apple launched the iPad 2 in the United States last week to strong demand, with many stores selling out and analysts estimating sales of 1 million units during the debut weekend.

Several other iPad 2 parts are sourced from Japan, said the IHS iSuppli report, noting some of these, particularly the chips, could be procured from alternative suppliers.

Goldman Sachs warned of potential bottlenecks in the supply of silicon wafers, conductive film used in LCD circuits and resin used to connect chips to boards -- products made by Japanese companies such as Shin Etsu and divisions of Sony , Hitachi and Mitsubishi .

In Taipei, shares of electronics supply companies rebounded from recent falls, with Hon Hai Precision and touch panel maker Wintek both gaining more than 1 percent.

EVEN THE KITCHEN SINK

Japan's top car manufacturers including Toyota Motor Co and Nissan Motor Co are struggling to restart production amid a shortage of parts, labour and power following the 9.0 magnitude earthquake and tsunami.

The largest U.S. automaker, General Motors Co , said it would temporarily idle a pick-up truck plant in Louisiana, where it builds the Chevrolet Colorado and GMC Canyon models, due to a parts shortage stemming from the crisis in Japan.

"Like all global automakers, we will continue to follow the events in Japan closely to determine the business impact," GM said in a statement on Thursday.

North American output is likely to be affected unless Japanese suppliers revive their plants and send parts within 10 days, Wolfe Trahan & Co analyst Tim Denoyer said in a note.

Renault Samsung, the South Korean unit of French car maker Renault SA , said it will cut back on weekend and overtime production because of a potential parts shortage, and GM's South Korean unit said it was considering a similar move.

"We have an inventory until the end of March. But we expect the crisis to be prolonged until April before being normalised in May," said a spokesperson for Renault Samsung, which makes one in every 10 Renault vehicles.

A Japanese company that makes galleys for the long-awaited Boeing 787 Dreamliner, said it could face delivery delays due to scarce gasoline supplies.

Jamco , which ships the galleys from Yokohama port after making them at a plant in Murakami, Nigata, in northwest Japan, said production was unaffected, but delivery could be hampered by gasoline supplies and higher prices.