Smart-Phone Suppliers Facing Threat in Disruption of Supply Chain

Taipei, March 15, 2011 (CENS)--Mitsubishi Gas Chemical Co., Ltd., a leading mobile-phone component supplier, notified its clients yesterday (March 14) suspension of supply and rejection of new orders, sending shock waves through the global mobile-phone supply chain.

Market players noted that should the supply suspension last more than one month, leading smart-phone vendors, including Apple, Nokia, HTC, and Samsung, may be forced to discontinue their shipment, leading to the disruption of the supply chain.

Mitsubishi Gas Chemical produces BT resin substrates, carriers for mobile-phone chips, with their major Taiwanese clients including PCB (printed circuit board) makers Kinsus Interconnect Technology and Unimicron Corp., which supply to various major mobile-phone brands.

In its notice, Mitsubishi Gas Chemical attributed the suspension of supply to the need for checking facilities and inventory, although its factories didn't collapse, according to PCB company officials.

Mitsubishi Gas Chemical and Hitachi Chemical, the world's largest and second largest IC substrate suppliers, both have major production bases located in the area stricken by the massive earthquake. The two companies boast global market shares of 50% and 40%, respectively, and both don't have production bases outside Japan. Therefore, there is no alternative supply source for the key component.

Taiwan's three leading IC substrate suppliers are Nan Ya Printed Circuit Board, Kinsus, and Unimicron, the latter of which have stocks for BT resin substrates for only one month and two weeks, respectively. The suspension of supply has occurred at a bad timing, since leading brands are scheduled to roll out new models in the second quarter. They would be forced to discontinue shipment, should the Japanese suppliers be unable to resume supply in time.