El Segundo, Calif. The global supply disruption caused by the Japan earthquake could happen in other regions of Asia that have a high concentration of technology industries, according to new research from IHS iSuppli.
“The disaster in Japan has exposed how the focus of electronics manufacturing in a single country can massively impact the highly interconnected global technology industry,” said Dale Ford of IHS, in a statement. “Because of this, it’s worthwhile to consider what could happen if a production disruption were to strike other key electronics production regions where manufacturing is highly concentrated. These regions include Taiwan, South Korea and certain areas of China. As we move forward, the global electronic industry will have to learn how to manage potential disruptions in various regions.”
For example, Taiwan is the world’s leading country for semiconductor foundries (companies that conduct the outsourced manufacturing of chips), accounting for 67 percent of global production, said IHS.
Taiwanese foundries — Taiwan Semiconductor Manufacturing Co. Ltd. and United Microelectronics Corp. — serve the manufacturing needs of global semiconductor companies, playing a key role in the global chip supply chain. There are more than 150 fabless semiconductor companies using foundry services worldwide, representing more than $30 billion in annual revenue, said IHS.
Some of Taiwan’s other major contributions to the global electronics supply include:
–24 percent of total semiconductors
–37 percent of display drivers
–58 percent of small/medium-sized liquid crystal display (LCD) panels
–34 percent of large-sized LCD panels
In South Korea, most of the manufacturing is concentrated in the Seoul metropolitan area with nearly 40 percent of the world’s DRAM capacity located near the city. Key players include Samsung Electronics Co. Ltd. and Hynix Semiconductor Inc.
South Korea’s overall contribution to global electronics production includes:
–59 percent of DRAM
–49 percent of data flash memory, also known as NAND flash
–27 percent of display driver semiconductors
–51 percent of large-sized LCD panels
–18 percent of small/medium LCD panels
China could potentially have the biggest impact on the supply chain with most of the world’s original design manufacturing (ODM) services conducted in the Shanghai and Shenzhen metropolitan areas for major electronic brands. IHS reports that four out of five mobile PCs are produced in the Shanghai area, while 25 percent of cell phones are manufactured in Shenzhen.