Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Short Supply of Japanese Electronic Parts Hitting Global Car Industry

First it was chips for computers and consumer electronics; then it was the raw materials used to make those chips. Now the earthquake in Japan is affecting the supply chain for components used in auto infotainment systems, according to the latest look at market conditions by the research firm IHS iSuppli.

Japan in 2010 accounted for 35 percent–or $11 billion worth–of the $31.5 billion global market for automotive infotainment electronics, iSuppli says. On top of that, Japan is responsible for about one-third–$7.3 billion–of the $23 billion market for chips used in cars overall. Aside from chips, Japanese companies produce LCD panels and optical sensors used to make in-car systems.

ISuppli says Renesas Electronics, Texas Instruments, Freescale Semiconductor and Fujitsu, all of which supply components to the auto industry, have all been affected by shipping problems and difficulty in obtaining raw materials. The problems could last weeks or months.

Problems like this aren’t just hitting infotainment systems. As The Wall Street Journal reported today, shortages of a single electronic part made by Hitachi Automotive that measures airflow in car engines have forced companies like General Motors, Toyota and PSA Peugeot-Citroën to cut their output at auto plants in the U.S. and Europe. The plant that makes the component is located to the north of Tokyo and has been shut down. Hitachi makes about 60 percent of the world’s supply for this type of part. The Journal said Toyota on Wednesday warned employees to expect a production halt at some plants in the U.S. and Canada.

Meanwhile, Japanese automakers have stopped production at several plants in order to conserve electricity following the loss of generating power from the troubled Fukushima Daiichi nuclear plant. There has been a 10 percent reduction in electrical capacity, iSuppli says. Additionally, companies like BMW, Volkswagen, Continental and Bosch have removed their expatriate employees from Japan.

Separately, Dow Jones reported yesterday that ZTE Corp., a Chinese maker of networking gear, is suffering quake-related supply problems. A company exec said it expects the problems to last as long as six months.


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