Supply chain not shaken by quake

Tech suppliers indicate that most do not get or sell products directly in Japan.

DBS stated, Japan earthquake has had a more adverse impact on OEMs, as they have had to pay higher prices to secure supply, than component makers.

While Venture sources selected components from Japan, it is still not affected as it secures a steady supply through a combination of cash commitments and superior market positioning. So far, no companies under DBS coverage have reported a shortage of components. Q1 is a seasonally soft quarter, and so there are sufficient inventories in the supply chain to sustain production up till May.

Despite a number of question marks over supply, DBS expects tech demand to remain healthy underpinned by a continued global economic recovery and unbridled demand for smartphones and tablets. Thusfar, companies have reported steady demand with no push-outs from clients. Most companies are confident of sequential growth after a soft Q1. Risk comes in the form of a prolonged and more broad-based disruption of Japan’s supply chain, affecting a much wider range of industries overseas.

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