Whoops-- has 1 1/2 - 2 weeks been expanded for all but e-machine??
Concerns are growing that the Taiwan earthquake could have a ripple
effect throughout the electronics industry.
Although attention initially focused on reports of only minor physical
damage to semiconductor plants, production has still been halted at
many facilities as the nation seeks to recover from the devastating
quake and its aftershocks.
Now, it appears, the factories could be closed for weeks. The biggest
problem is that many chip plants in the northern region of the island
still don't have electricity restored. Even when power has been
returned, it is often sporadic, industry officials said.
Also, because chip making requires highly precise processes, much of
the production equipment in the plants needs to be recalibrated after
the shocks. 'There are a lot of specialists flying to Taiwan right now,
' said Risto Puhakka, vice president at VLSI Research Inc. in San
Jose, Calif.
Finally, production is being delayed because many workers have not yet
returned to their jobs. Their own lives have been affected by the
earthquake, with many having lost family members or their homes.
The actual impact of the quake on the electronics industry may not be
known for even a month or two, analysts said. Taiwan produces between
13 percent and 15 percent of the world's semiconductors, according to
Business News, a trade publication.
One potential result is that demand for personal computers could exceed
the supply in advance of the critical holiday season for consumers,
analysts said. 'Supplies are going to be tight,' said David
Goldstein, president of Channel Marketing Corp., a research firm in
Dallas.
Taiwan is a major maker of memory chips, used mostly in PCs.
While memory chips have been in oversupply for nearly four years,
demand has been catching up in recent weeks. 'We'd been forecasting a
memory shortage for next year,' said Puhakka. 'But with this
earthquake, it could come earlier than we expected.'
PC makers could consider raising prices, but analysts said that is
unlikely because the consumer appetite for bargain machines has been so
strong.
More likely, analysts said, manufacturers will delay upgrading the
configurations of their base machines. For example, machines that might
have had 64 megabytes of memory will continue to have 32MB, generally
the current minimum in sub-$500 PCs.
Some PC makers said they expect to generally be unaffected by the
Taiwan earthquake. An official for eMachines Inc., a leader in the
market for value-priced PCs, noted that the company's suppliers are
generally in South Korea and the United States.
Other manufacturers noted it is too early to tell what the impact will
be.
Round Rock, Texas-based Dell Computer Corp. said it doesn't expect to
have a clear picture of the quake's impact until next week, though the
initial reports have been encouraging. Dell has a number of suppliers
in Taiwan and has some notebook computers manufactured there.
'Electricity seems to be the big issue,' said T.R. Reid, a Dell
spokesman. 'The government has stepped in, and now there are schedules
for availability of electricity. That's good because you can work
around that.'
Dell also makes some of its notebook PCs in Austin, and is now
exploring ways it could expand production there, if needed. The company
is also looking to alternative suppliers for certain components.
An official for Compaq Computer Corp. in Houston noted that with
continuing aftershocks, the situation in Taiwan remains unsettled.
'Right now, to the best of our knowledge, there will be some limited
supply disruptions,' said Alan Hodel, a Compaq spokesman.
'As for the impact down the road, it will be a while before that
becomes clearer.'
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