Laptop vendors burned in battery plant blaze
HP, Dell and Asus struggle to plug supply hole
Some of the world’s leading computer vendors have admitted that a worldwide shortage of laptop batteries will impact prices, shipments and sales.
Dell, Hewlett-Packard and Asustek have all grumbled about the dent in the supply chain caused, in part, by a fire at a Korean factory earlier this month where some laptop batteries are manufactured.
Taiwanese computer maker Asus said yesterday that the battery scarcity could blow a massive 40 per cent hole in its second quarter shipments. The firm’s vice president Kevin Lin raised the alarm at a news conference.
He told Reuters: "The shortage could affect 30-40 per cent of second quarter shipments, but it looks like a short-term issue.”
Meanwhile Dell has been talking to other battery suppliers in the hope of preventing prices being jacked up because of the current shortage.
However, it also admitted that it has raised prices on its separately sold batteries used for replacements or for additional notebook power because of the lack of batteries in the market right now.
A Dell spokesman said: "Pricing is being impacted by current availability. But we are working with our partners throughout our supply chain to reduce the impact on our customers.”
HP was slightly more reticent about the shortage, but did tell Reuters that it is in “regular communication” with LG Chem – the battery maker whose Ochang plant went up in flames on 3 March.
A HP spokesman said in a statement: "The full extent of the impact to HP and other OEMs is still being determined.
"We are aggressively working within the battery cell industry to secure additional supply of battery cells."
LG Chem, which is South Korea’s second biggest battery vendor, said its factory will be out of action for up to three months. ®
COMMENTS
1330m battery prices - ouch!
Primary 9-cell Lithium-Ion Battery (85 WHr) [add £117.50 or £3/month]
^^^ !!!!!
@TeeCee
Posted Wednesday 26th March 2008 13:32 GMT
"They probably do have alternative sources of supply and I'll bet that other manufacturers will quickly ramp up production to fill demand.
That won't stop them all using this as an excuse to jack up prices though."
Yes, this is true, but it's not quite that simple. Typically when a business has to ramp up production, in the short run their per unit costs will increase significantly (think about what happens when you bring in loads of new, inexperienced workers to provide the humanpower necessary to ramp up production -- efficiency goes through the floor and costs go through the roof). The remaining suppliers might turn an extra profit still (otherwise, what would be the point of ramping up production?), but not nearly as much as you'd think.
"This is exactly what happened many years ago when a Taiwanese DRAM plant went on fire. You could still get the stuff with no trouble, but 1 and 4 meg SIMMS (as made by world + dog at the time) became eye-wateringly expensive overnight due to the "shortage"."
Had they not increased prices, there probably would have been a shortage. Basic economic theory dictates that when supply decreases and demand stays the same, the price must be increased to prevent shortages. If you think about it, this makes sense -- fewer people will be willing to buy the product at the higher price, so the quantity of the product demanded will fall (hopefully) to roughly the same quantity of product that the remaining manufacturers are able to produce. It's not an exact science, though, and merchants get it wrong all the time. More than likely, they overshot on the dram pricing a bit, but this type of mistake is usually quickly caught and corrected for. As product sits on the shelf (or in warehouses) for too long, the merchant or supplier begins to drop prices to get it moving again. After all, warehousing surplus product is an additional expense that no one wants to pay.
Lithium = trouble
I remember my days associated with the battery industry.
You can build as many safety devices into the cell as you like, but the components are still very dangerous.
Lithium ignites on contact with water.
My guess is that this fire involved the component materials rather than finnished stock.
It is not the first Lithium cell plant to have a fire.
It is extremely difficult to stop a Lithium based fire, once it starts.
Setting up a battery plant using this technology is not a five minute job and is extremely costly.
What I saw was that whilst you could buy many brands of cell, manufacture of the more specialist types was concentrated at one or two plants.
One plant I visited had 10 major brands as customers, each selling under their own label.
The battery world will get more dangerous as designers look for more enegry from a smaller space. To get the higher energy density requires the use of more volatile chemicals.
<rant>
lets face it, li-ion batteries are like rats - theres pretty much one in existance for every man woman and child on the planet- they've been in virtually every rechargable portable electronic gadget for the better part of the last 10 years, and onl a handful have ever gone wrong
ive witnesed a lot of Ni-Cad and NiMH batery packs spontaneousl igniting in my readio controled car days to know li-ion arent alone in the burning up stakes
properly designed and calibrated li-ion battery packs have more safety features in them than your average nuclear power plant, if you look at just about every exploding battery story youl see they all have one thing in common- the use of non original generic chinese knnock off batteries that dispense with most of the expensive monitoring circuitly and careful calibration in the genuine battery packs
ive only ever had 1 li-ion pack fail on me and that was a £3.99 chinese copy dell axim x50 battery (thankfully while it was in the dell desktop charger) since then ive stuck with genuine batteries and have had no problems
what scares me the most thogh is people wth those cheap chinese mega capacity camcorder batteries pressed against their face while there taping something or another, a singed lap is one thing but having one of those vent with flame into your face would be horiffic...
</rant>
AC
Annus Horribilis !
Not a good year for the past 12 months so far , with the great SONY recall of all it's defective incendiary batteries in various laptops and notebooks , a factory fire virtually destroying Liteon's LCD displays for portable computers , and now a factory fire at a lithium ion battery factory !
As Murphy would say what can go wrong is always inverse to the ratio of it's importance, so what is next , could it be a factory fire at the plant supplying all Blueray players ?
Ouch , annus horribilis !
