Taiwan-based notebook makers, after evaluating the damage caused by Japan's earthquake on their upstream supply chain, pointed out that supplies of notebook battery cells and MLCCs were both affected slightly, and makers will need to start planning measures to handle rising prices for components such as DRAM, according to sources from notebook makers.

In addition to upstream components, PC demand from Japan, which is about 13-15 million units each year, may also be affected by the earthquake and notebook makers are currently in negotiations with their clients about their shipment schedules for Japan, and will consider making some adjustments.

Although Quanta Computer, Compal Electronics and Wistron have announced they have not been affected by Japan's earthquake, the sources pointed out that since information from Japan is currently still messy with both the government's new power brownout policy and the recovery of the transportation system still unclear, any impact on vendors may need some time to appear.

For battery cell supply, since most Taiwan-based notebook battery makers still have enough inventory, while demand from downstream partners is weak, the shutdown of Sony's battery cell plants will not immediately affect current supply.

However, in the long term, if the Japan government continues its power brownout policy and the problems with the broken transportation system do not get fixed, shortages of battery cells may still occur as Japan-based suppliers Sony, Sanyo and Panasonic are currently the major the suppliers in the industry, the sources noted.

As for MLCCs, despite that Japan-based Murata and TDK were both not affected by the earthquake or tsunami, their operations have still been forced to shut down because of power failures and the two firms have not yet set a schedule on the recovery of operations. Since Japan-based passive component makers mainly manufacture high-end products, as opposed to Taiwan's mid-range and entry-level models, notebook players will have difficulty finding replacement components.

However, notebook production is unlikely to see any major delays since most makers had already prepared a safe level of inventory, but the unclear information from Japan has already caused several players in rush to stockpile more inventory causing DRAM spot prices to rise over 5% on March 14, noted the sources, adding that the same situation may also happen to other components.

Quanta, on March 14, pointed out that Japan-based battery cell makers are mostly located in Western Japan and there was only limited damage to these makers; therefore the company currently does not have any strong concerns about supply issues.

Meanwhile, Compal pointed out that the company will continue to monitor the supply status of battery cells and MLCCs. Wistron noted that its subsidiary in Japan for product maintenance was not affected and its notebook production should not be affected by component shortages in the short term.