Apple defers iPad 2 launch in Japan; says delay not linked to supply chain squeeze

Apple has deferred the launch of its slimmer, lighter and faster rendition of iPad, the iPad 2, in Japan as the country grapples with massive destruction caused by a 9 magnitude earthquake and tsunami.

Reuters reported that Apple had scheduled its iPad 2 launch for March 25 in Japan.

Apple stated that the delay is not associated with a supply chain disruption. Computerworld reported that Japan supplies about 40 percent of the world's flash memory chips. Technology companies dependent on Japanese exports are fretting over the possible shortage due to a power crisis in Japan.

MacNewsWorld reported that the key component in the supply chain which has been affected is NAND flash. Earlier, prices of DRAM and NAND memory chips spiked on reports of plant shutdowns and power outages in Japan. Japan supplies about 14 percent of the global DRAM production.

Computerworld reported that spot prices of DRAM increased 7.5 percent while NAND memory chip prices shot up by 20.48 percent. Toshiba is a major supplier of flash memory to Apple.

IDG News Service reported that Sumco Corporation and Shin-Etsu Chemical, which supply most of the world silicon wafers, have stopped production. Both the companies are major suppliers to Elpida and Toshiba.

However, Apple is not completely reliant on Japan as WSJ reported in February that Apple placed a $7.8 billion order for key components used in hand-held devices from Korean electronics maker Samsung Electronics Co. for this year. Apple sourced liquid crystal displays, processors and NAND flash memory chips from Samsung.

Also PC Magazine quoting Korea Times reported in January that Samsung had signed an agreement with Apple to quadruple production of processors. The report also stated that Samsung was investing $3.6 billion to expand its fabrication plant in Austin, Texas. Apple's A4 systems-on-a-chip (SoC) is manufactured by Samsung.

In December 2010 Nikkei had reported that Sharp Corp. will invest 100 billion yen or $1.2 billion to build new production facility for small and medium sized LCD display. It was also reported that Apple will fund a portion of the investment.

While Apple's supply chain may not suffer significant delays due to its diversified supply chain, it could certainly lose significant revenues in Japan. Reuters reported that about 5 percent of Apple's revenue comes from Japan and it is a growth market for Apple as revenues grew 83 percent in the country in the period to $1.4 billion.