The discussions center on a possible partnership for production or developing manufacturing technology for organic light-emitting diode, or OLED, television sets, the people said.

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Less than nine months later, she’s expanding, VentureWire has learned, adding financials and order management to Kenandy’s core software, changing the software’s name to Social ERP (for Enterprise Resource Planning) and targeting customers that make products.

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The company has weathered a series of problems lately, particularly chip shortages stemming from manufacturing problems at Globalfoundries, the company formed by the spinoff of AMD’s manufacturing operations. AMD last month restructured its relationship with Globalfoundries, triggering a $703 million charge for AMD but giving it more freedom to make some of its products elsewhere. AMD also agreed to give up its remaining 8.8 percent stake in the manufacturer.

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The cuts are part of a plan announced last month to cut about 4,000 jobs at smartphone manufacturing plants at Salo, Reynosa in Mexico and Komarom in Hungary, in a push to move device assembly closer to components suppliers in Asia.

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Boy, oh boy, is Mike Daisey confused.

After a weekend of savage pounding by the media, Daisey, the opportunistic fabulist who was caught lying to one of the most respected radio documentarians in the history of broadcasting, reemerged in public today. In his latest attempt to mitigate the damage done to his reputation, he appears to compare himself to Mark Twain, opening his latest blog post by quoting — his words — another famous monologuist: “Reports of my death have been greatly exaggerated.”

Instead he seems to be borrowing from Phineas T. Barnum, the great American showman who is often credited — perhaps apocryphally — with saying “There is no such thing as bad publicity.”

I couldn’t tell you how ticket sales to Daisey’s show have been affected by the ensuing controversy and, frankly, I don’t care. I know that Daisey addressed it in opening comments before his performance of “The Agony and the Ecstasy of Steve Jobs” on the night of March 17 in New York.

In summary, his defense is that his work is theater based on a body of facts that are largely true, and though they shouldn’t have been aired as factual on “This American Life,” he stands by it as theatrical work. Never mind that he insisted, not once, but repeatedly according to one account, that the words “This is a work of non-fiction,” be printed on his show’s Playbills. (For an example see page 3 of this PDF.)

But the money quotes that give the deepest insight into his state of mind are these:

“Especially galling is how many are gleefully eager to dance on my grave expressly so they can return to ignoring everything about the circumstances under which their devices are made. Given the tone, you would think I had fabulated an elaborate hoax, filled with astonishing horrors that no one had ever seen before. …

“If people want to use me as an excuse to return to denialism about the state of our manufacturing, about the shape of our world, they are doing that to themselves.”

Right. Mike Daisey, a confessed liar who parlayed his appearance on “This American Life” into a months-long string of media appearances on CBS, MSNBC, HBO and PBS — which helped raise his public visibility, built buzz and goosed ticket sales — thinks he can retake the moral high ground?

The only benefactor of all this attention certainly hasn’t been Chinese workers, but Daisey himself. Some 70,000 people have seen his show in 18 cities, and tickets in New York have been going for $75 to $85.

Worse, he continues to believe it is he alone who has been shining a light on the problems that have emerged over the years with Apple’s manufacturing arrangements in China and around the world. “Given the tenor of the condemnation, you would think I had concocted an elaborate, fanciful universe filled with furnaces in which babies are burned to make iPhone components …”

Sorry, Mike, but the discussion about Apple, Foxconn and its employees was going on well before you elbowed your way onto the scene.

For openers, at the D8 conference in 2010, AllThingsD’s Kara Swisher and Walt Mossberg asked Apple’s then-CEO Steve Jobs about the situation at Foxconn, in the wake of a string of suicides.

That same year — indeed, only weeks after nine suicides by Foxconn employees — Bloomberg Businessweek’s Fredrik Balfour conducted a three-hour interview with Foxconn CEO Terry Gou, and also several unsupervised interviews with Foxconn workers, for a story featured on the magazine’s cover. The Atlantic Monthly considered Foxconn in the wider context of the rise of China as a leading economic power. The BBC looked at Foxconn after the suicides. Indeed, there had been a great deal of attention paid to matters related to Apple, Foxconn and workers in China, well before the days of Daisey. Who does he feel has not been talking about this?

In fact, let us not leave Apple itself out of that conversation. The way Daisey tells it, you might assume that the electronics giant is sweeping its dirty laundry under the nearest rug.

This is not the case. Awakened to allegations that emerged in 2006 of worker abuses and bad conditions at a Foxconn plant in Longhua — in a British tabloid newspaper, no less — Apple started issuing an annual document it calls its “Supplier Responsibility Progress Report.” The latest one, from 2012, is here (PDF). Reports are available from 2011, 2010, 2009, 2008 and 2007.

These reports hardly let Apple off the hook. Rather, they document progress made, as well as progress yet to be made. Apple CEO Tim Cook admitted to The Wall Street Journal earlier this year that a priority for 2012 is to reduce the number of hours that employees at Foxconn and other companies work. It is, as you can see by Apple’s own admission, the most difficult of its China labor issues to solve.

Hard as this is to believe, employees often want to work long hours — and to earn the overtime pay that comes with them. In being too aggressive, they run afoul of Apple’s demand that no one work more than 60 hours a week, six days a week. And keeping accurate records that prevent employees from overworking themselves is proving difficult. If you visited Foxconn, Apple’s own disclosures suggest, you would probably have no trouble finding someone who recently worked more than 60 hours in a week.

What you would have trouble finding are the underage workers that Daisey said — in a now-debunked statement from his stage show and radio appearances — were so plentiful. Apple’s 229 audits found none of those at the final-assembly plants owned by Foxconn and others, and found only five active and 13 historical cases of underage workers at other facilities it does business with.

You would also have trouble finding people poisoned by n-hexane. As Apple documents in its 2011 report, a poisoning incident did happen, and when it did, Apple ordered the factory in question to stop using the chemical, the use of which I understand, is already a violation of Chinese law. Most of the 137 people who were poisoned had returned to work by the time the report was published. One plant using the chemical was shut down entirely by local authorities.

Read any of these reports by Apple, and you’ll find not the PR-sanitized language you might expect, but instead a rather unvarnished assessment of a company trying to come to grips with the human costs of a deeply complex industrial operation. Each report, which Apple releases voluntarily generates a new round of negative press coverage. Meanwhile, China is, despite its size, still a developing nation, and it will be some time before workplace standards there come close to resembling what we take for granted in the U.S. It is an evolving situation, one that will improve over time.

And while I readily admit that consumers and activists should continue to pressure and engage Apple on the subject of workers’ safety and rights, in China and in the other countries where it does business, it rarely gets any credit for the progress it has made and the leadership it has shown.

On that note, I think the discussion on the matter has been a healthy and engaging one for the better part of a decade. Contrary to his own inflated sense of self-importance, Mike Daisey has added nothing of value to it, and should consider shutting up.

I said as much on CNN’s “Reliable Sources” yesterday, and have embedded the video below:

CNN Reliable Sources March 18 2012 from Arik Hesseldahl on Vimeo.

Who in their right mind would lie to Ira Glass?

That was my first reaction to the revelation that the theatrical monologuist Mike Daisey had lied or fabricated — or in his words, “taken dramatic license” with — certain parts of his stage play, “The Agony and the Ecstasy of Steve Jobs.”

When I met people at parties in recent weeks and told them that I write about technology and that I had devoted more than a decade to covering Apple, the first question I used to get was: “Did you know Steve Jobs?” Since about January of this year, that first question has become, “What do you think of Mike Daisey?”

I haven’t had a real answer. I hadn’t seen his show, which was favorably reviewed by the New York Times, nor had I heard the episode of the highly respected public radio documentary program “This American Life” titled “Mr. Daisey and the Apple Factory,” that had been adapted from his play.

The show — or shows — hit a cultural nerve at a critical moment. Apple is the biggest company in the world, sporting a market capitalization of $546 billion as of Friday, with $100 billion worth of cash and investments on its balance sheet and the most popular stable of consumer electronics products in the world, especially the iPhone and the iPad. All of them are manufactured by workers in China, who labor for wages that are low by Western standards, put in hours that by Western reckoning are long, under conditions that to Western eyes aren’t ideal, doing jobs that by any standard are incredibly tedious.

Daisey’s stage show, which became a sensation among New York’s chattering classes, sought to draw attention to the plight of allegedly oppressed workers at Foxconn, Apple’s manufacturing partner in China. As New York Times reviewer Charles Isherwood put it, the play “is a mind-clouding, eye-opening exploration of the moral choices we unknowingly or unthinkingly make when we purchase nifty little gadgets like the iPhone.”

The stage show had been adapted for radio on public radio’s “This American Life,” which is probably the most-respected radio documentary program in the history of broadcasting. And the Daisey episode was presented as documentary, meaning the radio show’s staff of journalists and producers were vouching for it being true.

The problem: Much of it wasn’t.

In the show, Daisey described a trip to China, as well as a visit to Foxconn’s outer gates and other manufacturing companies in Shenzen, where many are located. He delivers a detailed and emotionally riveting account of meeting girls as young as 12, 13 and 14 years old who claimed to work for Foxconn. This would be in violation both of local laws and of Apple policies.

He also told of meeting workers poisoned by a chemical called n-Hexane, used to polish screens.

And, perhaps most movingly, he related a tear-jerking scene in which he showed a working iPad to a man who said he had crippled a hand while making its parts in a Foxconn metal press, yet had never so much as seen one of the devices powered on. Seeing the iPad’s screen in action, he tells Daisey, “is like a kind of magic.”

The word “magic” fits oddly here, because these meetings didn’t happen as Daisey said. “This American Life” yesterday aired a lengthy episode entitled “Retraction,” documenting Daisey’s many liberties with the facts.

To help do so, a reporter for another public radio show — Rob Schmitz of “Marketplace” — did what no one else in the media seemed to be willing to do, which was subject Daisey’s claims to scrutiny. Most damning of all in Schmitz’s report was the testimony of Daisey’s translator, called Cathy. She was found — after Daisey had told TAL he had lost contact with her — and disputed many of the anecdotes taken from the play and used in the radio segment about Foxconn.

Among the fabrications: Daisey didn’t speak to quite as many people nor visit nearly as many plants as he said he did. She disputed finding underage workers. The n-Hexane poisoning incident occurred not at Foxconn in Shenzen where Daisey visited, but at a Wintek facility in Suzchou, more than 900 miles to the north of Shenzen.

The stage show, and therefore the radio show that was derived from it, turned out to be a mixture of facts and fiction. Which might be fine for a production on the New York theatrical stage, where fiction and fact blend readily. And, while it might be okay in entertainment products, you don’t expect it from a prestigious radio documentary program.

And that is where the problems began.

When Daisey’s monologue was adapted for “This American Life,” outrage began to grow among people who wanted to do something about it. It was, Glass says, the most downloaded episode of “TAL” ever, and public radio listeners did what public radio listeners tend to do. For one thing, they started a petition. More than a quarter of a million people have signed a petition at Change.org, inspired by the TAL production based on Daisey’s work, demanding that Apple make changes.

That includes crafting a “worker protection strategy” for new products released, as well as publishing data from Fair Labor Association audits.

Feeding the frenzy, Daisey stepped up as the leading voice for worker rights in China’s electronics industry. He was seemingly everywhere in the media. Since the TAL segment aired in January, Daisey has been seen on “CBS News Sunday Morning,” in a report that, like the “TAL” episode, is now going to have to be retracted or at the very least walked back.

Another CBS-owned property, CNET, hosted Daisey as part of “Reporters Roundtable,” alongside Charles Duhigg of the New York Times, co-author of a series of front page stories in that newspaper. Duhigg ended his “Roundtable” appearance by urging people who care about the issue to go and see Daisey’s play.

Daisey also appeared on MSNBC repeating the same anecdotes and tarnishing the usually shiny Apple. And on HBO. And PBS. And C-SPAN.

Needless to say, there will have to be many more retractions in the days ahead.

At this point, it’s hard to determine what’s more outrageous, Daisey’s lies to Ira Glass and his team, or the national media’s willingness to give Daisey a platform to repeat the same lies and fabrications without making the slightest effort to vet them.

The circumstances around Apple’s manufacturing arrangements in China aren’t new. As a columnist for Businessweek I wrote about Apple’s first round of “sweatshop” allegations in 2006, well before the age of the iPhone and the iPad, which had at the time first come to light in part because of the reporting by London’s Daily Mail.

I’ve never been to China. Many people know more about the on-the-ground facts concerning Apple’s factories than I do. But there are many reporters who have been there. In 2010, Bloomberg Businessweek’s Fredrik Balfour wrote a powerful cover story for that magazine, which aimed to get to the bottom of the string of suicides that occurred among Foxconn employees that year.

ABC’s “Nightline” visited Foxconn earlier this year. Its report was criticized in some circles, because at the time of his death, Apple’s late CEO Steve Jobs happened to be the largest shareholder of that network’s parent company, Disney. Also, ABC had been invited by Apple and Foxconn. Even so, “Nightline” anchor Bill Weir, seeing conditions very different from what Daisey described in the course of his reporting, wondered if Mike Daisey’s work was questionable.

At the very least, Daisey is a dramatist who now admits he chose to lie, but for reasons known only to himself. The chance to raise his profile and sell more tickets to his monologue are obvious potential motivations. Whatever it was, his dramatic product is meant to be consumed as thought-provoking entertainment, not as fact-based journalism, which many people assumed it was.

This is the crux of Daisey’s defense for lying to Ira Glass and his fact-checker: That he’s not a journalist and took dramatic license with the events, and now regrets doing the “This American Life” segment.

And that’s the real shame here.

Clearly, people care about how workers who make our electronics are treated, or there wouldn’t have been a market for Daisey’s show, or for an hour-long radio documentary adapting it. And the subject is one we need to discuss at length as a society. The net result of Mike Daisey’s efforts to put self-promotion ahead of the facts has badly muddied the waters, and has probably done more harm to the people he sought to help.

So, instead of illumination on a serious topic, we are left with little. Mike Daisey is an opportunistic fabulist and should be ashamed of himself for lying. Ira Glass and his team are ashamed for giving him wider attention, and have said so. But there are many more people who should be even more ashamed for taking Daisey’s lies at face value. There should be many more retractions and apologies in the days ahead.

But now we have to start the conversation about Apple and Foxconn and workers’ rights all over again, this time with real, verifiable facts at our command. Is that so much to ask?

(Image courtesy of Mike Daisey’s Web site.)

The analysts at the market research firm IHS iSuppli, considered by the investment community to be the most reliable of the organizations that conduct teardowns, were among that set. Today, somewhere in Southern California, an iSuppli analyst stood in line at a store and promptly took an iPad to a lab, where it was torn into, initiating the interesting process of estimating what it all cost to build.

Here’s what iSuppli’s team found: First off, there weren’t many changes from the last iPad, in terms of suppliers. “It’s most of the same characters we saw last time around,” analyst Andrew Rassweiler told me today. Wireless chipmakers Qualcomm and Broadcom both reappeared — Qualcomm supplying a baseband processor chip, Broadcom a Bluetooth and Wi-Fi chip, TriQuint Semiconductor suppling some additional wireless parts. STMicroelectronics once again retained its position supplying the gyroscope. Cirrus Logic supplied an audio codec chip.

The 16 gigabyte, Wi-Fi-only iPad that sells for $499 costs about $316 to make, or about 63 percent of the device’s retail price. On the upper end, the 4G-ready 64GB model that sells for $829 costs about $409 to make, or about 49 percent of the retail price.

The new cost figures represent an increase of between 21 percent and 25 percent, depending on the model, from the iPad 2, which iSuppli tore down last year.

So what did they find inside? An expensive Samsung display, for one thing. All those millions of pixels don’t come cheap. ISuppli analyst Andrew Rassweiler estimates that the display, which cost $57 on the iPad 2, has grown in cost to $87 on the latest iPad.

Rassweiler says that two other vendors, LG Display and Sharp Electronics, have inked display supply deals with Apple for the latest iPad, but only Samsung is thought to have fully ramped up production. Depending on the vendor, the display may cost as much as $90, he said.

One set of components remained essentially the same as before: Those that drive the touchscreen capabilities. Rassweiler says that three Taiwanese companies, TPK, Wintek and Chi Mei, supply parts related to driving the central interface feature of the new iPad, but he says to expect a major shift in how Apple handles the touch interface on future iPads.

The combined cost of cameras, including the front-facing and back camera, is pegged at $12.35, more than three times the cost of cameras found on the iPad 2, Rassweiler says. But it’s essentially the same setup as that on the iPhone 4, he says. As has been the case with cameras, the identity of the supplier wasn’t easy to determine because they try hard to hide identifying information from the prying eyes of teardown analysts. The candidates, however, include Largan Precision Co., a Taiwanese supplier of camera modules to wireless phone companies, and Omnivision. On the iPhone 4S, a research firm called Chipworks identified the supplier of the CMOS sensor in one of the cameras as having come from Sony.

As with other Apple devices, the main processor chip is an Apple-made A5X processor, one manufactured under contract by Samsung. The estimated cost of that chip is $23, up from $14 on the iPad 2.

Another part that’s more expensive than on the last iPad, but also better for a variety of reasons, is the battery. This one is estimated to have cost Apple $32, up from $25 on the iPad 2. But it constitutes a significant upgrade, Rassweiler says, with 70 percent more capacity than before. Apple benefited in part by lower prices in the lithium polymer material used to make the battery, offsetting the cost of adding a vastly improved battery.

ISuppli wasn’t the only outfit conducting teardowns of the iPad today. An enthusiast site called iFixit that encourages consumers to learn how to repair and upgrade their own electronics, flew technicians to Australia to conduct its own teardown analysis.

The three affected plants focus on smartphone production, and Nokia said it planned to shift much of that work to Asia, in order to be closer to its suppliers and speed up the time it takes to get products ready. Nokia will continue to do some customization work at all three plants.

“With the planned changes, our factories at Komarom, Reynosa and Salo will continue to play an important role serving our smartphone customers,” Nokia Executive VP Niklas Savander said in a statement. “They give us a unique ability to both provide customization and be more responsive to customer needs.”

The cuts will be phased in through the end of the year.

Nokia, of course, is in the midst of a major transformation, as it makes Windows Phone its primary operating system, shifting away from its homegrown Symbian OS.

The company previously announced other rounds of job cuts, including one related to the closure of a plant in Romania.

The first was last year in Hillsboro, Oregon, and during the visit, Intel CEO Paul Otellini announced that the new chip plant, or “fab” as they’re usually called, would be built in Arizona.

The main reason that Obama loves Intel is that it’s an example of the kind of manufacturing work that he’d like to see more of in America. As such, the sight of Intel spending $5 billion to build a new plant and adding 4,000 jobs is the sort of thing that any president would like to stand close to, especially at the onset of what looks to be a tough re-election campaign. It’s also one of those rare companies that’s riding high despite an uncertain global economy.

One thing Obama certainly didn’t mention was that Intel added plants in Israel and China in the last year as well. He’s also in no hurry to remind the audience that the chips that Intel makes will be shipped to China and inserted into computers and servers, many of which will be shipped into the United States.

We also learned this week from the New York Times, Obama seemed vaguely baffled by the notion that Apple’s iPhone is manufactured in China, and in a meeting in Silicon Valley last year asked Apple CEO Steve Jobs why they couldn’t be made in the U.S. Jobs’s answer, which is correct: Those jobs aren’t coming back. David Ricardo’s law of Comparative Advantage strikes again.

Anyway, the only video of the full speech that I’ve found came from the local TV station, ABC15, and thankfully they have made it embeddable.

In his remarks, the president is impressed both with the grand scale of things involved in building chips — he remembers seeing an electron microscope at Intel’s plant in Oregon that was powerful enough to display atoms, which is certainly impressive. In Chandler he’s impressed with what he says is the world’s largest land-based crane, which is being used in the construction effort. Enjoy the speech.

(Image is a screen grab from earlier in the video.)

AMD CEO Rory Read

First there’s Intel, which has parlayed its deep strategic command of the complex and expensive process of manufacturing chips into a commanding position at one of the crucial pivot points of tech hardware, despite the uncertain state of the global economy, and also despite the dire predictions of analysts.

Then there’s Advanced Micro Devices, which competes for the same sockets in PCs and servers that Intel does, but with a lot less success to show for it. While it reported a non-GAAP profit of 19 cents a share on $1.7 billion in sales, its outlook for the current quarter was weak enough to send AMD shares down 2 percent in after-hours trading. Its revenue forecast of $1.51 billion to $1.61 billion caught analysts by surprise, as they had been expecting average revenue of $1.6 billion.

Then there’s the matter of a $209 million charge from the writedown of AMD’s stake in Globalfoundries, the contract chip manufacturer that was cobbled together out of what used to be AMD’s factories in Germany, Texas, and one under construction in upstate New York; plus the former Chartered Semiconductor. That expense went a long way toward pushing AMD’s results into a 24-cent per-share loss on a GAAP basis.

Spinning off its expensive factories was supposed to save AMD, and it may well have done so. AMD now owns less than 9 percent of Globalfoundries. But the strategic shift has yet to pay off in the kind of success that AMD envisioned when it first plotted the move.

In 2011, it crossed the threshold of $50 billion in annual sales for the first time, having hit the $40 billion mark only last year. This came after a tough year — 2009 — during which sales declined a bit to $35 billion, down from $37 billion in 2008. But the larger point is clear: Intel continues to be a significant growth machine in a tech ecosystem that is supposed to be on the decline.

Who says so? “The experts.” Earlier this month, Gartner and IDC both reported what they described as the second-worst year for PC sales growth in recorded history, second only to the doldrums of 2001, when the world was beset by the dotcom crash, the onset of the global war on terror and general recession, all in one. This came after the same two outfits made similarly depressing predictions for worldwide IT spending.

Intel’s results tell a different story. Consider its strengths: Sales in its data-center group — chips being sold to companies building servers that will be used to power data and applications running on the Internet — grew 17 percent year on year to north of $10 billion. And the lowly PC? The machine that is said to be on the decline by so many people who claim to know what’s going on? Sales in Intel’s PC client group grew by more than $5 billion year on year to north of $35 billion.

How can that be possible? It’s an argument that Intel has been making for some time now, and is now becoming familiar: Persistent strength in emerging markets. As Intel CEO Paul Otellini said on a conference call with analysts today, emerging markets, where household incomes are improving to the point that consumers are able to buy their first PCs, are accounting for two out of every three units of incremental microprocessor demand. Which means that for every three chips of new growth sold in a year, two are sold in an emerging market.

PC sales in China, by Intel’s reckoning, grew 15 percent, and as yet have only achieved a household penetration rate of 35 percent, which says there’s lots of room still to grow. By comparison, the U.S. market is 90 percent penetrated, meaning nearly everyone who wants a PC has one. India grew 22 percent; Indonesia, 37 percent.

Here’s another really interesting metric that should give you some food for thought: In 2012, Intel will spend $12.5 billion on capital expenditures. That’s more than twice what it spent last year. What is it spending so lavishly on? Four new chip factories — in Oregon, Arizona, China and Israel — which, when completed, will turn out chips built on the very latest, edge-of-reality technology, where chips have transistors and other elements on them that are at the 14-nanometer scale.

How small is 14 nanometers? About one-fifth the size of a typical virus cell, and only slightly bigger than the thickness of the cell wall of a typical germ. Next year, there will be four factories, employing thousands of people, turning out thousands — and later millions — of these miniscule fragments of silicon that arguably constitute some of the most complex implements mankind has ever built.

And Intel does this profitably, which is so difficult and requires such financial scale that most companies that make other kinds of chips long ago gave up running their own factories and farmed the work of actually building them to other companies. Intel is so good at it that its gross margins in 2011 were 62.5 percent. Its full profit for the year was nearly $13 billion on $54 billion in sales.

Yes, we beat on Intel for not having conquered the smartphone industry or the tablet industry as readily as it spent the 1990s bending the PC industry to its will. There is a school of thought that says Intel is less relevant today than it was, say, five years ago, and that its anemic presence in the future of personal computing — smartphones and tablets — is all the evidence one needs to render that judgement. In fairness, smartphones and tablets are still on the rise, and Intel is starting to show some promising progress, though its competition and an industry-wide preference for chips based on the ARM architecture will be difficult to dislodge.

Still, it’s a little hard to find much fault with Intel, when the numbers so clearly demonstrate that, despite the conventional wisdom, it is clearly at the height of its powers.

Foxconn is working with the Chinese city of Zhengzhou to double the size of the workforce at its facility there, recruiting an additional 100,000 employees — the same number it hired in 2011. Valued at about $1.1 billion, the expansion would make the factory the largest smartphone production facility in the world.

That should make for a massive increase in production, once hiring is complete. Foxconn’s Zhengzhou plant currently cranks out about 200,000 iPhones per day, according to reports. So a doubling of its workforce would presumably also increase that number by a factor of two.

Yesterday, I published a story about the teardown analysis by IHS iSuppli of Amazon’s Kindle Fire tablet. And, as you may remember, the story related how, in the opinion of its analysts, it cost Amazon $201.70 to buy the parts and build the Fire — a sum which is only slightly above the $199 retail price of the device.

The other big news was how dominant the chipmaker Texas Instruments is among the suppliers. Its applications processor chip, wireless chips, and audio and power management chips add up to about $25, approximately 12 percent of the bill of materials (BOM), which is the aggregate cost of all the components. It’s a pretty solid victory for TI in the competitive tablet field, where, outside of Apple’s iPad, success has been rare.

Naturally, I asked Texas Instruments for a comment about this, and expected none. I’ve been writing teardown stories for six years (here’s the first I ever did); never once has the manufacturer of the device in question, nor any of its suppliers, given anything more than a “no comment.”

Manufacturers tend to hate teardowns because they’re invasive. Take a product apart and you find out who a company is working with — and you learn a lot about how they see things. With the Kindle Fire, for example, we learned that Amazon deliberately took a “less is more” approach to keep costs down, minimize its loss and pave the way to eventually selling the device at a profit.

Suppliers hate teardowns, too. There is nothing more secret — or more interesting to know — than what company is supplying a manufacturer with a key component. Companies can rise or fall on a strategic relationship with someone like Apple or HP — or Amazon. The first iPod, for example, put an otherwise unknown company named PortalPlayer on the map — until Apple replaced its chips with something else. Now that company is part of Nvidia.

Usually these suppliers are unwilling to rock the boat, and usually they’re covered by nondisclosure agreements. So when I do the typical reporter thing and call them for a comment, after a teardown clearly shows their chip or display or other component inside the product, the supplier always — 100 percent of the time, without exception — says, “No comment.” Probably they’d like nothing more than to brag about how their chip makes this or that product do amazing things, but usually they just can’t, won’t and just don’t say a word.

Until today. Today, in response to my questions of yesterday, I got a comment from Texas Instruments. And that meant I just had to share it. Here it is, courtesy of a company spokeswoman:

“We can confirm that TI’s OMAP4430 processor and WiLink 6.0 connectivity combo solution are inside of the Kindle Fire. … TI is thrilled to be a part of the Amazon Kindle Fire, which boasts powerful performance and engaging consumer experiences that are sure to make it a coveted device this holiday season.”

Not exactly riveting. But rare!

The job cuts will hit the company globally and will be completed by the end of the first quarter of 2012, the company said in a statement. The company says the move will reduce operating expenses by $118 million in 2012 and by $10 million in the fourth quarter of 2011.

The cuts will amount to about 1,400 of AMD’s 12,000-strong workforce. What you’ll read elsewhere is that AMD is suffering from a worldwide slowdown in PCs, caused in large part by the growth of Apple’s iPad business and to a lesser extent other tablets. But it’s a little more complicated than that when you consider that AMD’s share of the market actually grew slightly in the second quarter, according to the latest numbers I have from Mercury Research, which tracks the market share between the two chipmakers. As of August, AMD was running a 19.4 percent share of the PC and server business, up from 18.2 percent in the first quarter, while Intel’s share dropped slightly from 81 percent in the first quarter to 79.9 percent in the second. Those fractions of a percentage point actually matter to both companies.

The bigger problem is that AMD is nowhere in tablets or smart phones and that was one of the reasons that Read was brought in to replace Dirk Meyer, who surprised everyone by resigning after a fight with his board of directors in January.

In the meantime, expect AMD to make a big fuss about server chips in the coming weeks.

AMD’s statement is below.

AMD Optimizes Cost Structure to Enhance Competitiveness and Accelerate Growth

Operational Savings of More Than $200 Million in 2012 Designed to Accelerate Future Growth in Lower Power, Emerging Markets and the Cloud

SUNNYVALE, CA–(Marketwire -11/03/11)- AMD (NYSE: AMD – News) today announced a restructuring plan and implementation of operational efficiency initiatives designed to strengthen the company’s competitive positioning. AMD expects that these combined actions will create a more competitive cost structure and rebalance the company’s global workforce skillsets, helping AMD to continue delivering industry-leading products while improving productivity, reducing time-to-market and better aligning with key industry trends that are expected to drive growth.

“Reducing our cost structure and focusing our global workforce on key growth opportunities will strengthen AMD’s competitiveness and allow us to aggressively pursue a balanced set of strategic activities designed to accelerate future growth,” said Rory Read, AMD president and CEO. “The actions we are taking are designed to improve our ability to consistently address the needs of our global customer base and stake leadership positions in lower power, emerging markets and the cloud.”

AMD expects that the restructuring plan will result in operational savings, primarily in operating expenses, of approximately $10 million in the fourth quarter of 2011 and $118 million in 2012, primarily through a reduction of its global workforce by approximately 10% and the termination of existing contractual commitments. The workforce reduction will occur across all functions globally and is expected to be substantially completed by the end of the first quarter of 2012. Based on anticipated savings from the restructuring plan, AMD expects fourth quarter 2011 operating expenses will be approximately $610 million.

As a result of implementing efficiencies across the company’s operations, AMD expects to save approximately $90 million in 2012 operating expenses in addition to the restructuring plan savings, resulting in more than $200 million of expected combined operational savings in 2012.

The company expects to reinvest a significant portion of the savings to fund initiatives designed to accelerate AMD’s strategies for lower power, emerging markets, and the cloud.

The company’s actions pursuant to the restructuring plan will take place primarily during fourth quarter of 2011, with some restructuring plan activities extending into 2012. The company currently estimates that it will record restructuring expense in the fourth quarter of 2011 and in 2012 of approximately $101 million and $4 million, respectively. Of the total restructuring expense, approximately $56 million will be future cash expenditures in 2011, $33 million will be future cash expenditures in 2012 and $15 million will be future cash expenditures in 2013.

About AMD
AMD (NYSE: AMD – News) is a semiconductor design innovator leading the next era of vivid digital experiences with its groundbreaking AMD Fusion Accelerated Processing Units (APUs) that power a wide range of computing devices. AMD’s server computing products are focused on driving industry-leading cloud computing and virtualization environments. AMD’s superior graphics technologies are found in a variety of solutions ranging from game consoles, PCs to supercomputers. For more information, visit http://www.amd.com.

Western Digital CEO John Coyne warned yesterday on a conference call with analysts that the company expects significant impact to its hard-drive manufacturing operations in that country. It is one of several tech companies that has suspended operations in Thailand amid the worst flooding there in a half century.

Seagate, which reported earnings yesterday, also has operations in Thailand and said those are running at full capacity, but that some of its component suppliers have been affected by the floods.

“Given the severity of the situation and the extensive supply constraints caused by the disruption … the effects on our industry are likely to be substantial and will extend over multiple quarters,” Seagate said in a statement.

With the prospect of an industrywide shortage of hard drives affecting one vendor but not the other, shares of Seagate today shot up by $3.36, or more than 27 percent, to $15.42; Western Digital fell nearly 10 percent yesterday, but recovered today.

I checked in with Fang Zhang, who tracks storage for IHS iSuppli, the research firm that covers the electronics supply chain. While it’s too early yet to know the full impact, her initial estimate says that the worldwide production of hard drives will drop by about 30 percent, from 176 million units projected pre-flood to 125 million drives in the fourth quarter.

Apple CEO Tim Cook addressed the potential for a shortage on Apple’s earnings call with analysts on Tuesday because, naturally, it will affect his ability to turn out Macs this quarter and probably into next year. “I’m virtually certain there will be an overall industry shortage of disk drives as a result of the disaster,” he said.

One question I have is whether this could turn out to be an opportunity for the solid-state storage companies — the main supplier that comes to mind here is Samsung — that are popularizing flash-memory based storage drives in PCs like the MacBook Air and other machines. Will they boost production to fill that gap?

(Image via Consumer Queen.)

Inside, the phone is similar too, but there have been some strategic changes from one generation to the next that have important implications for Apple’s many suppliers. According to a teardown analysis conducted by the research firm IHS iSuppli, chipmaker Intel, which last year acquired the wireless operations of the German chip concern Infineon, has been almost entirely bounced out of the 4S in favor of a set of chips from Qualcomm. The shift to Qualcomm had been rumored as far back as last September.

Before Intel acquired its wireless unit, Infineon had previously supplied Apple with a chip known as a baseband processor that Apple had used in combination with chips from Skyworks and Triquint to work with wireless phone networks. “Qualcomm is the big winner here,” says Andrew Rassweiler, an analyst with IHS iSuppli who conducted the teardown. “It is selling Apple a whole suite of chips that adds up to about $14 to $15 per iPhone.”

Intel spent $1.4 billion to acquire Infineon’s wireless chip operations last year in a move seen as meant to shore up its presence in the wireless phone industry overall. It has struggled to win business for its Atom line of microprocessors, which are aimed at mobile devices like smartphones and tablets.

Infineon still has a small chip in the iPhone, but Rassweiler says it’s far less significant and a lot less costly than the one it supplied Apple before. “It’s almost like Apple threw them a bone with a 50-cent part after they lost a much more high profile chip that cost about $10,” he says. Intel had no comment.

ISuppli regularly conducts teardown studies of wireless phones and other consumer electronics devices in order to find out who a manufacturer’s vendors are — like most manufacturers, Apple prevents its suppliers from identifying themselves, much as they’d love to — but also to determine what each part costs. The combined cost of components — analysts check on the list prices of each part — is known as a bill-of-materials (BOM) estimate that gives a fair idea how much a manufacturer, in this case Apple, makes in gross margin on each device sold. Apple doesn’t disclose its gross margin on a per-product basis but when it reported its quarterly results yesterday it said its overall gross margin was 40.3 percent.

In the case of the iPhone 4S, Rassweiler estimates that the BOM cost ranges from $188 for the 16 gigabyte version of the iPhone 4S to $207 for the 32GB version and $245 for the 64GB version. Apple and its carrier partners sell the phones for $199, $299 and $399 respectively, typically with a two-year contract for wireless service that carriers use to subsidize the cost they pay Apple.

The costliest components are the ones that determine the price: Memory chips. Apple has been known in the past to rely mostly upon South Korea’s Samsung Electronics, the world’s largest supplier of memory, and from Japan’s Toshiba. In the phone that Rassweiler’s team tore down, the memory chips came from Samsung rival Hynix Semiconductor. “That struck us as a bit of a surprise,” Rassweiler says. It’s hard not to wonder if adding Hynix to the stable of iPhone memory suppliers is a partial response by Apple to the complicated patent fight it is waging with Samsung in courtrooms around the world.

Even so, Samsung appears to be have maintained its role as the manufacturer of the Apple-designed A5 processor that provides the iPhone 4S, and also the iPad 2, with most of its computing horsepower. Some published reports in recent months had suggested that because of the patent fight, Apple might end a relationship that dates back to the original iPhone and move its chip manufacturing contract to Taiwan Semiconductor Manufacturing Co., the huge chip manufacturing foundry. Rassweiler says there’s no sign on the latest A5 chips that that has occurred. “The markings are the same as what we saw in the iPad 2,” he says. The estimated cost for the A5 chip is $15 each, he says.

Apple started designing its own chips for the iPhone and iPad products beginning in 2010 with the release of the first iPad. The chip is thought to have been designed by teams from PA Semi and Intrinsity, two privately held chip design firms that Apple acquired in 2008 and 2010 respectively.

However, it’s also clear that the A5 chip is taking on more of the heavy computing lifting inside the device than the previous A4 chip, Rassweiler says. For example: The iPhone 4 contains a chip from privately held Audience Semiconductor, based in Mountain View, Calif., that handled noise cancellation. There’s no such chip inside the iPhone 4S, Rassweiler says, so it appears that noise-cancellation duties may have been moved to the beefier A5 chip itself.

Triquint Semiconductor provided a set of chips that make up a wireless transmit module that works with the wireless phone networks. Triquint has traditionally been an iPhone supplier, Rassweiler says, but the value of what it supplies to Apple appears to have dropped. One wireless chip company that has seen the value of what it supplies to Apple increase is Avago Technologies. Like Triquint, it too has been an iPhone supplier, but the overall value of the chips it supplies has gone up in the 4S.

STMicroelectronics, the European chipmaker, maintained its role as the supplier of gyroscope chips that help determine the phone’s position and rotate the screen for playing games and displaying pictures and videos. AKM Semiconductor again supplied the compass chip. Texas Instruments continued in its role supplying the chip that controls the iPhone’s display, and an audio chip.

One vendor could not be identified. Rassweiler says that Apple appears to have taken pains to hide the identity of the company that supplies the parts that power the iPhone 4S’s highly regarded 8 megapixel camera. This is not new, and the candidates include Largan Precision Co., a Taiwanese supplier of camera modules to wireless phone companies, and Omnivision. “We don’t know exactly who makes it,” Rassweiler told me. Whoever the supplier is, Rassweiler estimates the camera added $17.60 to the cost to build the iPhone. And they’re likely to make a lot on the deal. IHS iSuppli is forecasting that Apple will sell 81 million iPhone 4Ss around the world next year.

Update: A few of you have written in saying that it was Sony who supplied the camera. Maybe. The folks at Chipworks dissected the camera module and found a Sony-made CMOS image sensor inside it. That doesn’t make the whole module a Sony’s however. It could be a Sony camera or it could be that whoever made the camera used a Sony sensor. And last week Barron’s reported on some debate among analysts over whether or not Apple has split the camera supply contract 50-50 between Omnivision and Sony.

Arriving at Silicon Valley’s Computer History Museum, in the heart of the tech industry, with the leader of the free world talking jobs and digital, you might expect fantastic wireless access.

You might, but not so much if you are a “local” reporter and can’t jack into the extra-secret-special wireless link the national White House press corps apparently has reserved for itself. (They also get a lovely noshing buffet, whilst we tech reporters have been instructed not to touch the pineapple and scones or else!)

Famished for coffee and carbs, we’re left with glomming onto the museum’s slowish wireless service — there are lotsa geeks here today jamming up the lines — and every now and then getting some juice from Google. The search giant blankets the Mountain View, Calif. area near its HQ with free Wi-Fi, but it fades in and out.

I am now reconsidering the antitrust investigations that the Obama administration is conducting against Google, as long as its signal is good enough to check Twitter.

So this liveblog of President Barack Obama’s LinkedIn Town Hall — which will center on jobs and is titled, “Putting America Back to Work” — could be glacial with not much news, much like what I am expecting from the event itself.

I’d certainly like to work, as long as the wireless does! (Plus, limited power outlets in the room, so it’s every reporter for herself!)

But bygones, while we await the Prez!

10:18 am: One thing that made me flee Washington, D.C., when I worked for the Washington Post, was all the rigmarole that surrounded the appearance of and access to politicians.

I get it, the security and all, and am all for it on a general safety level. But, no matter how you slice it, it hinders any kind of movement or genuine interaction, like being stuck at a really dull opera. All the world’s a stage and we are all merely waiting in traffic.

In contrast, and one of the joys of Silicon Valley, is that anyone can get up right up into the grill of the various billionaire potentates littering the landscape, engage in a debate and get a possibly real answer.

Thus, I am hoping for a lot here from LinkedIn CEO Jeff Weiner, who is going to moderate the hour-long session with the President.

By the way, while he is busy running the business-focused social networking site, Weiner is looking good in a fancy suit, almost as if he could be Secretary of the Internet. I’d vote for him.

10:28 am: Some painless but hip music is playing now, as we wait, wait, wait for Obama, who is set to begin in 30 minutes.

I wonder if the President is ever early. Wouldn’t that freak the peeps out?

(Obviously, I am bored, so I shall now go monitor Twitter to catch up on the latest in the new bad-marriage-or-not cat fight between Brad Pitt and his ex, Jennifer Aniston — as if we need him to tell us Angelina Jolie is more interesting. Frankly, Angie’s midday snack is more interesting than Jen.)

There is now what appears to be a Secret Service dude next to me, giving me a hairy eyeball. If I am jailed over my wireless protest, please give generously to my defense fund.

Free the Internet! Free the Internet!

10:35 am: Finally, the production guy is up giving out the rules. Turn off the cellphones, no making noise.

The head Secret Service guy then takes the stage. No getting out of your seat. No sudden movements. And no crossing the blue line in the front row.

“All joking aside,” he says, he will take you down. He also notes that if the President moves toward you to shake your hand, “do not move toward him.”

I love Secret Service agents — especially when played by Clint Eastwood — and wish I had one to give a few people in tech a little smackadoo on my behalf. And not only if they moved toward me!

10:47 am: This little frisson of excitement is followed by more waiting, as the final seats are filled up in the room, which is an unusually (and welcome) multi-racial and gender-balanced crowd for Silicon Valley.

Various White House aides skitter back and forth like nervous ground squirrels — I would imagine their life is one big effort to avoid any gaffe — so the Prez must be near.

I am actually looking forward to seeing him, as I never have in person and am looking forward to seeing the famous Obama charm and techie cred.

Indeed, he is probably the most fast-forward tech president there has ever been. That said, buffeted by more serious issues facing the nation, his administration has delivered on few — by which I mean none — of its promises around the digitization of the U.S.

Our high-speed broadband, for example, is still woefully slow, inordinately expensive and not easily available nationwide.

And I will not even go into the need for increased focus on math and science education or the importance of our broken visa policies.

But the topic today is jobs, which is an arena where Silicon Valley and tech shines in the U.S., even as manufacturing of it has mostly moved overseas. How tech can help improve in the creation of jobs will be issue No. 1 here.

10:55 am: Total silence with five minutes to go. I need the President around to quiet my kids.

Now, LinkedIn Chairman and VC Reid Hoffman comes in, so the event is probably about to begin.

And, indeed, Weiner emerges to cheers, to give a little speech on “changing the way we work … and connecting talent to opportunity.”

11:01 am: Then, the session starts right on time with President Obama.

He begins with a rote speech on jobs, which is nonetheless the most important issue he faces going into next year’s election.

11:14 am: Ah, wireless glitch! Back!

President Obama is inexplicably in the middle of a Medicare question, which gives him an opportunity to talk about the need for the rich to pay more taxes.

And pass his American Jobs Act, of course.

11:17 am: More on proposing legislation for retraining workers, such as the questioner’s mom.

Now to a group of email questions. The first is about when small businesses are going to get a break from onerous regulations and taxes.

President Obama says since he has been in office, he has cut taxes 16 times for those who create a business.

But he is not going to apologize for some regulations, such as those for the financial industry over the mortgage crisis.

“There are some regulations that have outlived their usefulness,” he says, but others not so much.

11:24 am: The next question is from a Chicago IT employee. Except she is not employed.

She is asking a question about keeping her skills up and what programs are needed.

“The best thing we can do for you is that the unemployment rate goes down,” said President Obama, but also adds that making it easy to go to school while waiting on a job is also important.

“Just looking at you, I can tell you are going to do great,” he tells her in an awkward effort at reassurance.

Thanks, Barack, but she needs a job!

11:28 am: A veteran is asking a question about transitioning out of the military.

Obama launches into a story of a medical technician who faced all kinds of experiences, but had to start over again with new classes when out of the military. He suggests some level of credentialing based on experience.

11:33 am: Obama gets to pick out someone from the crowd and manages to pick out a dude who is a former Googler — although he only says that he works down the street — and is out of work by choice.

He asks: “Will you please raise my taxes?

A plant? I wish!

President Obama asks the name of the start-up. “A search engine,” says the ex-Googler-in-disguise, who is Doug Edwards, an early marketing exec there who actually wrote a book on being an ex-Googler.

“That worked out well for you,” kids President Obama.

Everyone likes a rich-guy joke!

He is soon onto the idea that we’re all dang lucky and declares he does not want it to turn the debate over taxes into a rich-poor war.

Bottom line, he notes that we have to raise taxes on the very wealthy. Frankly, if we raised taxes on a bunch of folks in this room, it would help a lot.

11:42 am: A teach-training question, especially math and science teachers.

President Obama is all for it.

He is meaning well here, but all he seems to offer is a lot of bromides about the importance of education and errant related anecdotes.

Like one from IBM, where the company hires the kids in the program at the end.

President Obama wants students to see a direct connection between learning and jobs.

Then, he kind of says it again. Gosh, he can talk. How does the well-fed and wirelessly connected White House press corp take it? Lotsa donuts, I would imagine.

President Obama also wants us to turn off the electronics and video games for kids, too, thereby instantly losing the votes of my two sons!

Another laid-off guy is up at the mic. He had 22 years in IT management and is disheartened.

He wants a statement of encouragement from the CEO of America.

President Obama assures him that his track record of success gives him a leg up, but that the problem is the economy and the global meltdown, too.

It’s systemic, apparently.

“The problem is not you, the problem is the economy as a whole,” says President Obama.

That was the last question. Weiner, who has been sitting quietly (I know it was hard, Jeff, but good job), thanks the President and tells him that this is a big issue.

President does his thanks, too, for being able to speak, although not really that much was actually said.

And then a genuine moment, finally, of clarity.

“Look, we’re going through a very tough time, but we have gone through tougher times before,” he says. “But the trajectory we are going on is one that is more open, more linked …”

He talks about the need for being ready to take advantage of that opportunity.

“Things have gotten so ideologically driven, putting party above country,” he adds, that nothing is getting done. That’s why the people, the voters, have to demand leadership from their elected officials.

Or, presumably, fire them and let them try to find another job, too.

It might turn out to be the best idea yet, if these pols don’t agree on something and quick.

Supply chain sources tell Taiwanese trade mag DigiTimes that Foxconn Electronics is pumping out 150,000 next-generation iPhones per day, with a goal of shipping up to six million in September alone. With volume like that, fourth-quarter iPhone shipments could rise as high as 22 million.

Which is just about the number some analysts expect Apple to sell during the period. BTIG analyst Walter Piecyk, for example, predicts Apple will sell 21.5 million iPhones in Q4, though he argues it could sell far more than that if the company adds Sprint as a third carrier in the United States, and the debut of a brand-new iPhone at Verizon causes a big spike in sales.

“Since the iPhone 4 has been launched we estimate that AT&T and Verizon have represented 30 percent of Apple’s unit volume,” Piecyk says. “If the U.S. continues to represent 30 percent of Apple’s iPhone sales, it would imply a global iPhone demand for as many as 30 million iPhones in calendar Q4.”

Question is, can Apple deliver that many phones?

Foxconn has in recent years seen its share of negative press. There was an explosion that killed three people at one of its plants in June. Prior to that there was a disturbing string of suicides that so shocked the sensibilities of Western consumers that it prompted demands for better working conditions and two lengthy cover stories in Wired and Bloomberg Businessweek. The concern was significant, in no small part because of the shadow the matter cast over Foxconn’s most prominent customer, Apple, which has done its best to force Foxconn to make the lives of its workers better.

Manufacturing electronics by the millions isn’t exactly mentally stimulating. The Wired story used the phrase “repetitive, exhausting, and alienating,” and it’s not hard to imagine going stir-crazy after doing it for any length of time. That’s why it’s interesting to see the news out of China today that Foxconn is going to boost the number of robots doing those repetitive tasks on its assembly line.

The story from Xinhua News, China’s state-controlled news agency, is headlined “Foxconn to replace workers with 1 million robots in 3 years,” and relates that the announcement came from Foxconn CEO Terry Gou himself at a company dance party.

Eerily absent is any comment on the reaction of those employees in attendance. Did they cheer at the thought of being freed up by robots from the least-popular jobs on the line? Or did they begin to worry anew, grasping the economic realities that additional factory automation bring with it?

Robots are efficient, they don’t get tired, and aside from routine maintenance, they don’t take breaks. They also don’t complain about soul-killing work conditions. All of this makes them appealing to Foxconn management and its growing list of clients.

But as anyone who knows even the barest details of the history of factory automation in the U.S. auto industry is aware, robots have a funny way of causing job losses. While Foxconn already uses some 10,000 robots now, the story says, the number is going to multiply by a factor of 100, to one million robots within three years. If those numbers turn out to be accurate, there is simply no mathematical way that some portion of the 1.2 million people currently in Foxconn’s employ can avoid losing their jobs. And that can’t help but cause other unexpected ripple effects throughout the Chinese economy.

(The image is a screen grab from the trailer for the 2004 Will Smith film “I, Robot,” which I obviously selected with tongue in cheek. Real robots used in the assembly of electronics look more like the one assembling cellphone speakers in the video below, from a Florida-based company called AccuPlace.)

Crocus Technology, a closely held company founded in 2006, is among a number of companies hoping to commercialize chips based on a technology called MRAM, for magnetoresistive random-access memory. The start-up and a state-owned entity known as Rusnano on Tuesday are expected to discuss plans to set up a company to build a factory in Russia that would make advanced versions of the MRAM chips.

The Sunnyvale, Calif., company, which had previously raised about $60 million, said its existing venture-capital investors will put up an additional $55 million as part of the project. Rusnano will provide most of the remaining $245 million.

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“At this point, we don’t know when we can go back to normal production,” said a Renesas spokeswoman, Makie Uehara.

Electronics and auto makers world-wide could be hurt by reduced output from Renesas, which makes key components.

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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.

Manufacturing has stopped at Shin-Etsu Chemical Co. Ltd.’s Shirakawa facility, and MEMC Electronic Materials has stopped manufacturing at its plant in Utsunomiya. Together, the two facilities account for a quarter of the global supply of silicon wafers, the basis of building chips.

The Shin-Etsu Chemical plant by itself supplies about 20 percent of the world’s silicon supply, and it specializes in making 300-millimeter wafers, which are the dinner-plate-size discs of silicon used in the more advanced chip factories, commonly referred to as fabs. Shin-Etsu, iSuppli says, supplies several memory chip manufacturers, particularly those that make flash memory, used in everything from iPhones to memory cards, and also DRAM, the main memory used in PCs and servers. ISuppli says the global market is going to be hit hard, which in turn means you can expect prices on both flash and DRAM to soar. Shin-Etsu has said it would set up production at other plants, but it’s hard to know how long that will take.

MEMC’s Utsunomiya facility accounts for five percent of worldwide wafer supply. MEMC said it expects that shipments from this facility will be delayed during the near term.

In a related note, iSuppli has quantified the impact of the shutdown of operations at Mitsubishi Gas and of Hitachi Kasei Polymer. The two companies produce about 70 percent of the world’s supply of the raw materials used to make printed circuit boards. The key material in question is called copper-clad laminate or CCL. The two companies say they’ll be able to ramp production back up within two weeks. The good news is that electronics manufacturers have enough circuit boards in inventory that they can probably keep their operations running without interruption.

ISuppli goes on to check in on a few chip companies in the affected region: Elpida Memory says its fab in Yamagata has been damaged, and the lack of electricity is hurting production. It’s running at about half its normal capacity.

The quake also damaged about 40 percent of the production capacity of Renesas Electronics. Production has stopped at its Tsugaru fabs where it makes analog and discrete chips, at its Naka fab where it makes system-on-chip and microcontrollers, and at its Takasaki and Kofu fabs, which also making analog and discrete parts.

Half of Fujitsu’s production capacity has been damaged. While its fabs and wafer equipment are intact, the lack of power, gas and wafers have slowed things down considerably, and it expects to recover in about three to four weeks.

One company that is holding up well: AKM Semiconductor, notable for the compass chips it produces for Apple that are used in the iPhone and iPad 2. Its main production fab in Nobeoka is well out of the quake zone and hasn’t suffered any loss of power.

Take for example the attention today on lithium ion batteries used in notebook PCs. Demand right now is not terribly high–it’s a time of the year when consumers are buying fewer PCs–but consider what happens if the crisis persists. As Taiwan’s Digitimes observes, a good bit of the world’s production ecosystem for lithium ion batteries used in notebooks are not only located in Japan, but many are in areas affected by the quake or within the evacuation radius of the troubled nuclear power plant there.

Sony, which makes notebook batteries, and Hitachi, which makes a key battery part called an anode, both operate plants in the disaster area, and both have been shut down for the time being, according to a research report from Pranab Kumar Sarmah at Daiwa Securities in Hong Kong. Numerous other companies that make battery parts also operate in the disaster area, and most of them are affected.

What about the iPad? I just heard from Wayne Lam, an analyst at iSuppli, the research firm that tore down the iPad 2 the other day. He tells me markings on the iPad 2′s three-cell battery pack include a label that reads “assembled in China.” However, he says that applies only to the finished battery pack. A closer look at the markings reveal a reference to “Apple Japan.” He thinks that’s sufficient proof the battery cells came from Japan. “Typically, battery cells are made at the site of assembly but since this Li-Ion Polymer battery is unusually thin, it may be the case that it requires battery cell manufacturing technologies that Japan has.”

Then there’s the LCD display market. LCD manufacturing is an extremely precise process, one that doesn’t take kindly to the power shortages and rolling blackouts caused by the loss of generating capacity at the crippled Fukushima Daiichi power plant. Typically, Japan derives about a third of its power capacity from nuclear power, and this plant constituted a big portion of that. Again, it’s Sony and Hitachi plants located in areas affected by the disaster. Between them, the two companies produce 90 percent of the world’s supply of Anisotropic Conductive Film, an interconnect material that’s widely used in LCD panels.

Another key part in LCD displays–a color polarizer–is made by Fuji Film. Dale Ford, another iSuppli analyst, said earlier this week there have been indications that supplies of these have been impacted, which will drive prices up, which will in turn be reflected in the final price consumers pay for their TVs and monitors. Something tells me the lingering effects of this disaster are going to trouble the tech economy for some time to come, especially if the state of Japan’s power grid remains uncertain.