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Chip prices jump as Japan disaster hits tech supplies

SEOUL, March 15 (Reuters) – Prices for key technology components spiked and global supply disruptions were expected to last for months as the toll on Japan’s infrastructure mounted after Friday’s devastating earthquake and tsunami.

Research firm IHS iSuppli said on Tuesday the quake and its aftermath could result in significant shortages of some electronic parts and lead to big price hikes.

Spot prices of NAND flash chips had already jumped 20 percent on Monday, while DRAM memory chip prices rose 7 percent, iSuppli said.

Japan accounts for one-fifth of the world’s semiconductor production, including about 40 percent of flash memory chips used in everything from smartphones, tablets to computers.

“While there are few reports of actual damage at electronic production facilities, impacts on the transportation and power infrastructure will result in disruptions of supply, resulting in the short supply and rising prices,” iSuppli said.

“Components impacted will include NAND flash memory, dynamic random access memory (DRAM), microcontrollers, standard logic, liquid-crystal display (LCD) panels, and LCD parts and materials.”

Even if shipments of semiconductor parts affected by the quake were disrupted for only two weeks, shortages and their price impact were likely to linger until the third quarter, iSuppli said.

FLASH MEMORY DEMAND BOOMING

Demand for NAND flash memory chips has been surging, led by mobile devices and tablets such as Apple Inc’s iPad 2, which is estimated to have sold almost 1 million units during its weekend debut.

Toshiba Corp , which supplies about one-third of the world’s NAND flash memory chips, said it was still inspecting its System LSI factory in Iwate, the only one halted by the quake and tsunami and could not say when it might re-open.

Taiwan’s Wintek , which makes the touch module for the iPad 2 said it had more than two-weeks of inventory left and the short-term impact was limited. However, a source at the company said it was using Japanese components and was looking for secondary suppliers.

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