Japan’s supply chain sees light at the end of the tunnel

The human impact of Japan’s earthquake and tsunami will linger for years, but the damage to the electronics industry supply chain is nearing its end. Most facilities are back up and running, or close enough that one market analyst predicts that shipments will be normal during the critical third quarter.

Manufacturing for semiconductors, autos and many types of systems was hit hard by the triple whammy of the quake, tsunami and the myriad issues surrounding the nuclear facilities. When IC plants shut down, the impact rippled through nearly every industry.

“Things are down to a dull roar, there are no longer any red flag issues,” said Mark Brainard, vice president for Hella Electronics. The automotive electronics supplier had to do a lot of scrambling after the March 11 disaster to meet supplies. Only a quick redesign kept an automotive production line from shutting down.

One market research house said this week that the end of supply chain issues is near. “Even the semiconductor companies suffering the most direct damage from the quake, full production will resume near the end of the third quarter,” Dale Ford, senior vice president for semiconductor market intelligence at IHS iSuppli, said at a recent conference.

The efforts taken by the Japanese to make this comeback have been incredible. They faced one of the worst disasters the world’s ever seen. The shock to this industry was also extremely severe. “In the history of the electronics supply chain, nothing has had such a broad impact as the Japan earthquake, tsunami and nuclear disaster,” Ford said.

Getting production up during the third quarter is important as many nations ramp up for the holiday buying binge. Japan’s people are still struggling, but at least the country’s critical economic base is once again becoming stable.

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