Japan And The Economy

Any company involved in electronics hardware — anything with a chip or a battery or a screen — should be concerned. As Johnny Evans notes in Computerworld's Apple Holic blog: "Japan makes more than 40 percent of the world's electronic components. Some of the world's largest suppliers of key materials are based in the disaster zone itself, where earthquake, tsunami and radiation leaks from the Fukushima Daiichi nuclear plant have wrecked lives and devastated infrastructure." Production of silicon wafers has stopped at important factories. Companies around the world rely on Sony, Panasonic and Sharp to produce batteries and screens.

We live in a just-in-time world where nobody, at any level of the supply chain — from factories to stores — likes to keep too much stuff on hand. That makes operations more efficient. But it also means that you're more susceptible to disruptions. So far we haven't seen shortages of LDC televisions at BestBuy and iPads are still flying off the shelves. (Apple's stock has been down a bit in recent days, in part due to concerns over supplies. But if companies find that they won't be able to get products in and out of Japan for several months, the problems could filter into the retail sector.)