Flooding in Thailand alerts electronics manufacturers

7 11 2011

Large scale flooding in Thailand could have a devastating impact on the electronic components industry with a number of companies due to be affected significantly.

The production of several products including semiconductors, hard disk drives and various additional electronic components has been halted due to the unprecedented size of the flood damage.

It is, as yet, difficult to assess just how significant the impact of the halt to manufacturing will be on the electronics market globally. It may be that the number of companies involved is minimal, or that those within Thailand can recover quickly to limit the damage.

However, either way it seems likely that the damage will affect production of semiconductors in both the final quarter of this year and the first quarter of 2012, at least.

The situation is comparable to the damage done by the Japanese earthquake which struck earlier this year and affected production for several electronics companies.

On that occasion though, it appears as though things could have been much worse

For the electronics industry specifically, the long term damage could have been particularly bad given the amount of equipment such as connectors and components which the country produces.

Even though it would normally be considered a negative sign, excessive industry served as a real boost for the global semiconductor industry in the first quarter of 2011.

The level of inventory helped to alleviate the damage done by the Japanese earthquake which hit the country, and the electronics industry, so hard in February of this year.

The shortage of basic components such as semiconductors was not nearly as bad as it could have been.

The statistics show that the days of inventory (DOI) among chip suppliers stood at an estimated 80.3 days at the end of the first quarter in 2011. This was up by 1.1% from the 79.4 days in the final quarter of 2010, and it was also an increase of 9.1 days from the same period in 2010.

For information on the connectors available from a number of leading providers, visit www.challengercomponents.com





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