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Apple might face Ipad 2 component supply shortages

Key parts are difficult to replace
Fri Mar 18 2011, 10:01

MAKER OF SHINY TOYS Apple might face component supply shortages for its recently released Ipad 2 after the earthquake in Japan caused major disruptions for Japanese suppliers.

Apple could be missing several key parts for its tablet, including its electronic compass, battery and glass display, according to market research firm Isuppli.

The compass in particular will be difficult to replace. Yamaha, Aichi Steel, Alps and ST Microelectronics can all supply electronic compasses, but they cannot easily be replaced due to how sensitive they are. A complete redesign of the tablet could be required in order to use a different compass.

Five parts of the Ipad 2 come from Japanese suppliers, including NAND flash from Toshiba, DRAM from Elpida, the electronic compass from AKM Semiconductor, the display glass most likely from Asahi Glass and the battery from Apple's Japanese division.

The problem for Apple is that aftershocks of the recent earthquake make it impossible for semiconductor firms to restart business, as any later shock over five on the Richter scale results in shutdowns. This will further delay production of Apple's key components.

There might even be other components sourced from Japan that have not been identified by Isuppli and could make Apple's production difficult over the coming weeks and months, particularly because its latest tablet has been selling well.

If it fails to meet demand it will have a major problem on its hands, especially with many investors growing wary of its continuing growth potential after a stock downgrade. µ


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