A power outage at a Japanese chip-making plant is causing big headaches for Toshiba, which is a major supplier of flash memory for popular consumer gadgets such as Apple’s iPad and iPhone.
Toshiba said the disruption means its shipments of so-called NAND flash chips, a type of memory chip that’s used in a host of consumer electronic products, may be reduced by up to 20 percent for the next two months.
Analysts, however, said that’s probably not enough to cause problems for Apple or other companies that use the Toshiba chips.
“It is true that Toshiba is a strategic supplier of NAND flash memory to Apple,” said financial analyst Brian Marshall, who follows the tech industry for Gleacher. “But Apple pretty much sources flash from everybody. I think they can get flash from other people.”
Toshiba, the world’s second leading supplier of NAND memory, said the brief power outage occurred Wednesday at its Yokkaichi memory chip plant in central Japan.
A backup power system was not able to fully compensate for the drop in voltage and production processes were affected, according to a company spokesman, who told Bloomberg News that Toshiba expected the plant would not fully resume operations until today.
While the outage reportedly lasted less than one second, even a brief disruption could interrupt sensitive production processes and render a large number of chips unusable, said Dean McCarron, a technology analyst who follows the semiconductor industry for Mercury Research.
“If you lost all of your work-in-process inventory, then 20 percent sounds about right,” he added.
Flash memory is in demand because of the explosion in popularity of small electronic devices, from smartphones and tablet computers to music players and other gadgets. But while the disruption is a blow to Toshiba, analysts said the worldwide supply of NAND chips is healthy and other manufacturers, including industry leader Samsung, can probably make up the difference.
“There are always spot issues, but overall this is doubtful to cause a huge concern to the overall market. There are plenty of suppliers out there,” said Jim McGregor, chief technology strategist for In-Stat, a market research firm. In addition to Samsung of Korea, there are several Taiwanese flash manufacturers.
In addition, the timing of production cycles means that most of the consumer products intended for sale during the peak holiday season have probably already been manufactured.
“You’re usually looking at a cycle of six weeks to two months, from start to finish,” said McCarron, “so this would be affecting consumer supply that would be expected to appear almost in February,” when production and sales are usually lower anyway. “So it’s not that bad of an alignment, although obviously you would never want it to happen.”
A spokesman for Apple did not immediately respond to a request for comment.
Marshall said he does not expect the reduction in Toshiba’s output will be significant enough to drive up costs for Apple or other manufacturers.
Contact Brandon Bailey at 408-920-5022; follow him at Twitter.com/BrandonBailey.
