The technology industry is rife with bottlenecks
The US-China tech cold war is making companies more aware of them than ever
JAPAN HAD long since lost its lead in electronics. Or so many thought. When an earthquake and tsunami hit the country in 2011, its continued centrality to the industry quickly became apparent. Copper foils for printed circuit boards, silicon wafers to make chips, resin to package them—for many components Japan was the home of the biggest, sometimes only, supplier. As production ground to a halt, customers scrambled to find alternatives. Many had to limit their output, like carmakers reliant on Renesas Electronics, a leading maker of engine-controlling chips whose wafer-fabrication plant sustained heavy damage.
Natural disasters—whether cataclysmic like the Japanese earthquake or merely destructive like floods or wildfires—regularly test the electronics supply chain. Now a geopolitical shock from President Donald Trump’s efforts to isolate China has thrown the industry’s structure into sharp relief—and exposed its choke points (see table).
This article appeared in the Business section of the print edition under the headline "Pinch points"
Business June 8th 2019
- The technology industry is rife with bottlenecks
- Taiwan’s computing titans are caught up in the US-China tech war
- Charity begins at work
- What slumping demand for cruises says about Chinese tourists
- American trustbusters are rattling Google, Amazon, Facebook and Apple
- A merger of Fiat Chrysler Automobiles and Renault is no more
- Disgruntled investors are losing patience with central Europe
- Electric-scooter startups are becoming more cautious
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