Market observers have predicted that NAND flash memory, which is widely used in smartphones, tablets and other digital consumer electronics, will be in tight supply due to supply concerns caused by the recent earthquake in Japan.
The earthquake and several aftershocks which struck the eastern coast of Japan on March 11 has caused power outages and damaged production facilities. Toshiba, which competes neck-and-neck with Samsung Electronics in the global NAND flash market, was among the companies which saw production disrupted by the earthquake.
Toshiba suffered from a power outage at its NAND flash fab December 2010 which cause shipments in January and February to fall as much as 20%, and, just days before the earthquake on March 8 experienced another brief outage which caused estimated damages to up to 48,000 wafers, market watchers claim. The March 8 incident has not yet been officially disclosed by the company.
Though Toshiba's production in Yokkaichi suffered little impact as it is far from the northeastern regions struck by the earthquake, damages from the quake could still be significant to the global production for NAND flash memory, the observers believe.
Toshiba holds a 35% share of the global NAND flash market, supplying chips to consumer electronics vendors including Apple and flash card companies such as SanDisk, and for many new tablet devices.
Toshiba has not yet provided details about how the earthquake affected its business. But SanDisk, which partners with Toshiba to make NAND chips, revealed that their JV manufacturing plants were down for a short period of time due to the earthquake but were back up and operational as of Friday morning, Pacific Time. SanDisk claimed its current assessment is that there has been minimal immediate impact on wafer output due to the quake.
The quake is likely to have a certain impact on Toshiba's operations, juging from the impact on shipments of the December outage, the observers indicated.
Toshiba's supply constraints signify opportunities for its major rivals including Samsung, Hynix and Micron. However, there is growing concern about a potential shortage of 12-inch blank silicon wafers, the observers pointed out. Japan's Shin-Etsu Handotai (SEH) and Sumco, two major wafer silicon suppliers to chip companies, are likely to see constrained supply over the short term due to the quake's impact, the observers said.