Toshiba and Hitachi shutter LCD plants for one month

ELECTRONICS GIANTS Toshiba and Hitachi have said some of their Japanese LCD manufacturing plants will be shut down for a month following last week's devastating earthquake.

Both Toshiba and Hitachi have shuttered LCD plants near Tokyo for a month as they deal with the aftermath of last week's magnitude 9.0 earthquake. Both companies are citing damage to the plants, while power shortages are likely to worsen matters.

Toshiba and Hitachi's closed plants manufacture small LCD screens for use in smartphones and automotive devices. Damian Thong, an analyst at Macquarie Capital Securities in Japan told Reuters that Toshiba's two small LCD screen manufacturing plants, one of which is still operational, account for five per cent of global production.

Prolonged shutdowns of electronics manufacturing plants has led investors to worry that a global shortage will ensue. Lenovo's chief executive Yang Yuanqing told journalists, "In the short term there won't be much impact. We are more worried about the impact in the next quarter."

Similar sentiments have been echoed by others and have led to Toshiba's shares falling 30 per cent since the earthquake, while Lenovo has seen its shares fall more than four per cent. Analysts are also suggesting that Apple's Ipad 2 production might face shortages due to supply chain problems.

Any component shortages are likely to be felt a month or two down the line as inventory is purchased a few weeks ahead of production. Manufacturers outside of Japan are likely to pick up the slack in the meantime, however decreases in output capacity is likely to result in increases in prices. µ