LONDON – Consumer electronics firm LG Electronics Inc. said Tuesday (April 19) that its home appliance division faces a shortage of ICs from Japan and is seeking alternative suppliers, according to a Dow Jones report.
The "supply-demand imbalance" is believed to be due to the earthquake and tsunami that hit Japan on March 11 and has kept a number of wafer fabs shut since then. In addition LG Electronics has relied heavily on Toshiba, one of the chip companies whose fabs have been affected.
"We've been sourcing about 70 to 80 percent of semiconductors for our home appliances from Japanese companies but we are fast diversifying the suppliers," Dow Jones quoted Lee Young-ha, president of LG's home appliance division, as saying.
It is believed that Hynix Semiconductor Inc. and Panasonic are two companies that have been asked to increase their supplies to LG Electronics.
Lee said he expects global chip supplies to return to normal within two or three months, according to the report.
LG will continue to diversify its supply chain even after the situation has improved in Japan. It may also have to raise prices of its equipment by about 5 to 10 percent because of higher raw materials costs, the report said.