Hedging Turmoil

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.



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About Mike

Mike Buetow is president of the Printed Circuit Engineering Association (pcea.net). He previously was editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He spent 21 years as vice president and editorial director of UP Media Group, for which he oversaw all editorial and production aspects. He has more than 30 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow