Battery manufacturers are turning to alternative components sources besides those in quake-hit Japan to ensure there are no shortages in supply. This will, in turn, result in a shifting supply chain landscape for the industry, a news report noted.
A report by Wall Street Journal last week stated that battery component makers from countries such as the United States, Europe and Taiwan have noticed an upswing in business, as battery makers seek to increase their list of suppliers beyond Japanese plants that were forced to shut down.
Japanese company Kureha, for one, had to shut down its plant in Iwaki, which is located near the epicenter of the earthquake that hit Japan on Mar. 11. The company, which supplies polyvinylidene fluoride that is used as a binder in lithium-ion batteries and acts as a critical component in batteries used for electric vehicles, previously held sway over 70 percent of the global market for the polymer.
As a result, a spokesperson for U.S. component supplier Arkema, which produces polyvinylidene fluoride, said they received an uptick in calls since the earthquake. Taiwanese battery component maker C-Tech United is also benefitting from the changing supply chain landscape. Jason Wong, a company spokesperson, told the Journal that times have never been better for its business since the earthquake.
Lithium-ion batteries are used to power a variety of consumer devices including smartphones and tablets.
Despite the shuttering of Japanese plants, there is currently no shortage of batteries for mobile phones and laptops due to a two-month supply buffer, noted Gartner analyst Jim Tully in the report.
The disruption in component supply, however, has highlighted to battery makers certain deficiencies in their supply chain management. Taiwanese battery makers, for example, are "grumbling that Japanese companies are too far away to provide adequate supplies" and will be looking to local sources instead, he said.
That said, incumbent suppliers have a short-term advantage over their rivals: the time-consuming but necessary process of "qualifying", according to the report. This process is to ensure battery safety given the potential of them overheating or exploding and usually takes months to complete depending on suppliers, noted Tully.
He pointed out that the reordering of the global supply chain is inevitable, though. "When the dust settles, there will be a shakeup in supply chains," he predicted.
Beyond battery components, an earlier report highlighted the impact of the quake on the overall IT industry with one industry watcher pointing out that it would take up to six months for global hardware supply chain to normalize.