By now you have surely heard of the devastating earthquake that hit Japan on Friday local time. The 8.9 Richter scale quake set off a surge of tsunamis that, as of this writing, were still threatening the Pacific Rim, Hawaii and even the Western coastline of North and South America.
In Japan, several factories were closed as result of the quake. Sony, for one, closed three plants and evacuated all employees, according to published reports.
Added with the uprisings in the Middle East and Northern Africa, it’s been a cruel month for world stability. The former took several EMS and PCB plants, including those of AsteelFlash and Fuba, offline, while the uncertainty has given way to rapidly increasing fuel costs around the world.
Over 40% of the world’s NAND flash and roughly 15% of the world’s DRAM output are manufactured in Japan, according to Jim Handy of Objective Analysis, a semiconductor research firm. Then there’s the litany of major consumer and industrial product OEMs that call the island nation home. (Objective Analysis anticipates “phenomenal price swings and large near-term shortages” as a result of this earthquake.)
Like so many disruptions — be they natural or man-made — today’s events should serve as dramatic reminder not to put all your eggs in one supplier’s — or regional — basket. Hedge your bets; spread your risk.