SUPPLY CHAIN PROBLEMS FROM QUAKE CONTINUE

    A damaged port is seen Saturday in Ishinomaki, Japan.

A revealing report from the Los Angeles Times.

The powerful earthquake that rocked Japan last month knocked out a hillside factory owned by Shin-Etsu Chemical Co. Little known outside industry circles, Shin-Etsu is the world's biggest producer of advanced silicon wafers, a key material needed for the manufacturing of semiconductors. Its Shirakawa plant represented 20% of the globe's capacity to produce the building blocks on which some key high-technology products depend.

The disaster could prove to be a major concern for chip makers, including Intel Corp. and Toshiba Corp., that buy wafers from Shin-Etsu, analysts said.

But it also has turned the spotlight on a much broader problem in the global economy: Companies around the world often rely on small networks of suppliers that may be thousands of miles away. A good number of those suppliers are in Japan.

Already, quake-related shortages of automotive electronic sensors made by Hitachi's Automotive Systems business have been blamed for halting or cutting production of vehicles in Germany, Spain, France and Shreveport, La.

The crisis also is expected to slash the supply of some vehicles such as Toyota's Prius and contribute to higher passenger car prices in the U.S., where temporary worker layoffs already have hit Ford Motor Co., General Motors Corp. and some Japanese auto firms.

Chinese computer maker Lenovo Group was among the latest to warn that a shortage of components from Japan could crimp supplies of finished products, in its case the LePad tablet computer. Another Chinese firm, ZTE Corp., a major producer of cellphones, said it could face shortages of batteries and LCD screens for months.

The likelihood of more disruptions to come has touched off a scramble for alternative suppliers. It has sparked a run-up in the price of memory chips and some parts. And it is almost certain to lead to a rethinking of a global production and logistics system in which a natural disaster in a small part of Japan's industrial base could have such broad effects around the world.

It a very fascinating read on how the quake has affected manufacturing all over the world and inside Japan. However its important to remember the article only covers manufacturing there are other economic aspects that it does not even touch.