The Butterfly Effect appears due to Earthquake Interrupting Japanese Electronics Supply Chain

The Butterfly Effect appears due to Earthquake Interrupting Japanese Electronics Supply Chain

A butterfly flapping its wings in the rain forest causes the storm on the other side of the earth.

The collateral damage from last month's massive earthquake and tsunami in Japan is now extending to the electronics industry.

U.S.-based research firm IHS iSuppli said Friday the disasters had led to the "most significant" disruption ever to the industry's supply chain.

The earthquake, massive tsunamis, nuclear explosions and leaks, the unprecedented disaster caused the Japanese economy a tremendous impact, including consumer electronics, one of the pillar industries in Japan.

Japan produced the global wholesale electronics industry, covering almost all aspects of the chain, from upstream equipment manufacturers, the key raw material available to the middle of the chips, electronic components manufacturing, to the downstream end-products, have a strong competitive edge and objective Share.

Currently, Toshiba, Fujitsu, Sony, Panasonic, Hitachi and other companies forced to close or suspend a number of plant management, Motorola and other foreign electronics companies in Japan, the factory has also been affected. According to information provided by Sony and other companies, the company is trying to clean up, to restore normal operations.

Affect the situation as a whole, the direct result of the earthquake and tsunami damage and plant shutdown, power shortage and poor traffic conditions on the transport and export restrictions on products, will spread to the entire electronics supply chain. Currently, including the panel, chip, LED and camera and other electronic product markets are subject to a certain degree of impact.

China is located in the global electronics supply chain in the end, and these four industries are closely related to Japan. This butterfly affects the Chinese already in them.

However, this bubble is not an absolute number as productivity is growing. On one hand it's iPad's growing sales and on the other hand is its competitors expanded the market. But this is still based on iPad2's aggressive price to occupy its competitor's expectations. And this, make iPad2 sales keep growing, which means it's not only growing from its market growth but also it grows from competitors. Compare to iPad, its competitors productivity are very low considering the expectation that they have.

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