The UK channel
Regarding the UK, there does seem to be some immediate impact on the channel, but it's unclear how much of it is rational. We spoke to Scott Frankling, marketing executive at Castleford distie Target Components, to get a view from inside the channel.
"With our own economic issues paling into insignificance, the global IT industry will nonetheless be affected by the events in the Far East," said Frankling. "Certain effects are already in process: Sony, Toshiba and Samsung are already enduring massive share-price drops and memory, particularly Flash, price hikes came into effect over the weekend. In some cases, as we have experienced first-hand, suppliers are outright refusing to quote as prices rocket!
"As has been reported since the disaster, the production of silicone wafers, used in the integrated circuits and micro-devices, has been hardest hit due to the manufacturing process relying on a large amount of energy, a majority of which was supplied by the Fukushima power station. These plants have stopped production for the time being as the production lines have been damaged and north-eastern Japan endures limited power supply.
"But is the UK dealing with real issues with distribution or, as some cynics might say, inflated pricing as a result of profiteering? After all, the UK's stock of memory is likely to be already en route to Europe, if not the UK. The stocks will inevitably come into ‘short supply' and prices continue to "increase. The truth is we really won't know after such a short period of time, but the longer-term effects will surely be felt over the coming months.
"From a UK perspective, it is also worth pointing out that the imminent price hikes will be in addition to other global factors such as the upward pressure from rising fuel prices, Chinese labour laws and fluctuations in exchange rates. We do, unfortunately, expect to see larger prices than the actual impact on production justifies, as has always been the case with memory pricing in the face of any disaster/ other impact over the years."
Frankling makes a good point that the quake should not have materially affected immediate supply, as it's already in transit. But inevitably trading is going to factor in speculation about future supply, leading to an increase in demand. If suppliers decide to raise their prices in response to increased demand that remains, as ever, their prerogative.