5 iPad 2 Components Japan's Earthquake Made Scarce

By R. Colin Johnson

The recent earthquake in Japan has shuttered its manufacturing plants, putting on hold the fabrication of critical components for Apple's iPad 2, potentially creating shortages worldwide.

Apple's iPad 2 online sales were already delayed a month when the earthquake hit, after which Apple decided to also delay the debut of the iPad 2 in Japan.  Now analysts are predicting delays in the delivery of iPad 2s worldwide due to shortages of five key components sourced from Japanese suppliers.

When Japan's earthquake hit, it applied what geologists call a mega-thrust to the main island—shifting it and everything on it eight feet east—in the process spoiling any delicate electronics manufacturing operations, most of which have been shuttered until the situation stabilizes.

Most semiconductor fabrication operations cannot run when earthquakes in excess of 4.5 magnitude are felt; the 9.0 earthquake that hit Japan was followed by 542 aftershocks and four foreshocks, over 45 of which were greater than 6.0. As a result, most semiconductor and micro-electronics fabrication operations are still down and could be for weeks or months.

IHS iSuppli has identified five components inside the new iPad 2 that will be in short supply due to manufacturing stoppages caused by the Japanese earthquake and tsunami. (Source: iSuppli)

 

Apple does not list sources for its components, but an IHS iSuppli teardown analysis of the iPad 2 has identified five components sourced from Japanese suppliers. If any or all of these key components remain in short supply for long, inventories could be used up, causing shortages of iPad 2s just when demand is peaking worldwide. These components include :

1. The earthquake and subsequent tsunami has shut down manufacturing of the NAND flash chips used in  the iPad 2's solid-state disk (SSD). IHS iSuppli reports that Toshiba manufactured the low-power mobile NAND chips. Toshiba, which has manufacturing facilities in the same Tokohu district as the stricken Fukushima Nuclear Power Plant, reports that "we have concerns for the impact on short-term production at all of our facilities ... operations and production stopped."

2. Likewise, the dynamic random access memory (DRAM) requires semiconductor processing steps that cannot be performed when seismic conditions are unstable. IHS iSuppli reports that the iPad 2's DRAM is supplied by Elpida Memory, also with manufacturing located in the same Tokohu district as the Fukushima Nuclear Power Plant. Elpida reports that its "plant is not in operation ... due to power shutdown caused by the earthquake." 

3. The electronic compass used in the iPad 2 is a delicate magnetic mechanism available only from AKM Semiconductor (Tokyo), located about 150 miles from Fukushima and experiencing rolling blackouts due to electricity shortages caused by the nuclear crisis.

4. The touch-screen glass is "likely" made by Asahi Glass, according to IHS iSuppli. Asahi reports "production operations have been suspended and it is expected to take approximately one month to restart."

5. Finally, the lithium ion battery for the iPad 2 uses a special ultra-thin architecture that is manufactured only by Apple Japan Inc. 

It takes only a shortage of one component to delay shipments of new iPad 2s. Luckily, there are potential second sources of flash and DRAM, but the e-compass and touch-screen glass will be harder to replace, and there is no second sourcing available for the custom battery pack.