Earthquake, Tsunami in Japan may shake Flash Drives and Memory products market globally

The supply of flash memory chips, a principal component in hot-selling tablets and smart-phones, will likely be affected by the earthquake in Japan, according to a report. But the factories that manufacture flash are well to the south of the quake's epicenter, possibly mitigating the impact.

An 8.9 magnitude earthquake and series of big tsunami hit Japan on Friday, causing massive damage. Over 40 percent of the world's NAND flash and roughly 15 percent of the world's DRAM are manufactured in Japan, according to a report released today by Objective Analysis, a firm that does semiconductor-related market research.

Most of Toshiba's flash chip (NAND) production in Yokkaichi, far south of the earthquake's epicentre. U.S.-based SanDisk also gets flash chips from this location. (Credit: Objective Analysis) SanDisk, which sources flash memory from a Toshiba manufacturing facility in Yokkaichi, reported a shutdown of manufacturing plant.

Apple is large consumer of flash memory and has signed half a billion dollar deal with Toshiba in the past for supply of flash memory. But Apple has alternative sources for flash memory such as Samsung and Micron Technology.

Much nearer to the earthquake's epicenter, Fujitsu and Toshiba have wafer fabs in Iwate prefecture. Fujitsu's Iwate plant manufactures flash microcontrollers and system chips for games machines, digital appliances, and automotive products, according to EE Times.

"Currently, there are indications that the Iwate factory has been affected by a power outage. All factories are being inspected for damage," Toshiba said.

In response to such news prices of all storage and memory products have gone up upto 40%. As a result all supplier in e-commerce space have requested to de-list their products from online retail websites.

I think there are negative sentiments in the market which has evidently increased prices of flash drives and memory products. Un-stable situation of Japan has been adding to it. There were 2 blasts in nuclear reactors already. T the same time vendors for such product finding it as opportunity to earn. There might be slight rise in the prices but now vendors looking at earning more on their stocked inventory.

E-commerce site too procuring good no of Sandisk pendrive from their vendors on consignment basis at the same time, online retailers are planning to run a special promotion on pen drives, external HDD and memory cards to book their top line.

Picture is still hazy. There may be substantial price hike due to low or no manufacturing of memory products in Japan. Sony has also shut their operation. But all this is a part of precautionary measures from the companies.

Hopefully soon life will be on track in Japan. My prayers and best wishes with Japan

God Bless Japan!!

Nikhil Kunwar