Several analysts have speculated that Apple could face component supply issues for its new and popular iPad 2 due to the natural disasters in Japan, and research firm IHS iSuppli has identified several specific components that are produced in the country. According to the company, the DRAM and NAND flash memory, the battery, the compass, and possibly the glass are all made in Japan.
Some of these components are replaceable from other sources (for instance the DRAM and NAND flash memory), and some factories have reported in as not being damaged. iSuppli said, however, that even those factories that weren’t damaged are likely to experience difficulty in getting supplies, delivering finished products, or even experience employee shortages while the country deals with the disaster.
“While some of these suppliers reported that their facilities were undamaged, delivery of components from all of these companies is likely to be impacted [sic] at least to some degree by logistical issues now plaguing most Japanese industries in the quake zone,” the company wrote in its report.
iSuppli added, “Suppliers are expected to encounter difficulties in getting raw materials supplied and distributed as well as in shipping out products. They also are facing difficulties with employee absences because of problems with the transportation system. The various challenges are being compounded by interruptions in the electricity supply, which can have a major impact on delicate processes, such as semiconductor lithography.”
First up are those components that are sourceable elsewhere. iSuppli has said that both the NAND storage and DRAM chips used in the iPad are currently produced in Japan. Toshiba makes the NAND chips, and that company has said that it has had to scrap wafers damaged during the quake.
NAND flash memory is available from other companies, however, and iSuppli said the kind of NAND used by Apple in the iPad 2 is also produced by South Korean-based Samsung and U.S.-based Micron Technology. In theory, if Toshiba falls behind in its delivery, Apple could turn to either or both of the other two companies for supply.
A company called Elpida Memory Inc. supplies the DRAM used in the iPad 2. It’s not known if there are issues with Elpida, but this is another component that is also produced by Samsung should Apple need more.
iSuppli’s research found that the battery pack used in the iPad is labeled “assembled in China,” but that it’s using cells produced by Apple Japan, a subsidiary of Apple itself. iSuppli’s report did not identify any specific reason why Apple Japan wouldn’t be able to continue supplying batteries for the device, but the report lists a variety of logistical issues that could affect any manufacturer in the country, as noted above.
“Typically, battery cells are made at the site of assembly but because the iPad 2’s lithium-ion polymer battery is unusually thin, it likely requires advanced battery cell manufacturing technologies that reside in Japan,” Wayne Lam, senior analyst, competitive analysis, at IHS iSuppli, said in a statement.
iSuppli believes that Apple could have trouble sourcing this component from another producer if it does encounter difficulties making the batteries.
The compass used in the iPad 2 is produced by AKM Semiconductor, and iSuppli again cited potential logistical problems that could disrupt supply of this component. While electronic compasses are available from other manufacturers, iSuppli believes that calibrating these components is a “tricky” affair, which could complicate using another source for them if there are problems.
“Compasses are sensitive to electromagnetic interference. Furthermore, the iPad 2’s compass works in close coordination with the tablet’s accelerometer and gyroscope,” Jérémie Bouchaud, director and principal analyst for MEMS and sensors at IHS, said. “This makes it impossible to simply replace one manufacturer’s compass with another.”
The fifth component identified by iSuppli is the glass used on the iPad 2, which the company believes is Dragontail Glass from Asahi Glass of Japan (see our report on how Apple made the iPad 2 so thin for more). This is the most speculative of the five items, however, as Apple isn’t telling anyone what glass it is and Asahi hasn’t held its own hand up, either.
If it is Dragontail Glass, however, Apple could be looking at problems because Asahi has reported damage from the quake at three of its facilities. Whether this translates into shortages remains to be seen.