The Earthquake in Japan will Affect us all!

Ok, so first things first. The earthquake that struck Japan last week followed by the Tsunami and subsequent aftershocks is a terrible tragedy for Japan its people and all associated and affected by it. My heart goes out to the whole country.

I cannot see how anyone could not be moved by the images and the scenes of destruction shown by the media.

I have been asked by my team here how this will affect us over here and in our business. Clearly our hope is that our Japanese customers are ok and unaffected by the quake, however right now we are yet to hear.

Right now there is a huge shortage of electrical components due to the earthquake in Japan. The Financial Times (FT) states that 30% of the worlds flash memory (our USB’s included) are made in Japan! 10-15% of D-Ram which is a key component in every personal computer also made in Japan along with approximately 40% of the worlds technology components.

Toshiba Corporation, the world's second-largest maker of NAND chips after South Korea's Samsung, has halted operations at its plants in areas affected by rolling power outages. Also, Shin-Etsu Chemical Co. and Sumco Corp., which both make silicon wafers needed to produce semiconductors, have temporarily stopped operations because of damage from the earthquake.

Clearly there will also be huge impact on the car industry with Honda, Toyota, and Nissan all having huge manufacturing plants making vehicle parts in North east Japan.

When supply goes down the price goes up, simple economics!

Any flash memory that was available to the market was brought in bulk by Apple, Dell and HP over the weekend leaving the world with massive shortages, hence the increases we are seeing daily in the price of USB’s. It is unlikely to end in a couple of weeks and my gut feeling is that prices have some way to go before they come down again. I would advise clients to buy when they need and to accept the increases, I don’t believe this problem will be going away anytime soon!

Last Friday's earthquake and subsequent tsunami killed more than 10,000 people, while millions remain without power or adequate food. Near-freezing temperatures have forced 450,000 Japanese into shelters. Concerns continue to rise about radiation leakage from Japan's Fukushima Dai-ichi nuclear plant. Despite the Japanese government pumping $183 billion of emergency funds into its economy, the country's stock market has fallen more than 10% in the last two days.

Take some time out of your day and say a prayer for the people of Japan.

Simon