A global recall of about 8 million Sony Corp notebook-computer batteries is creating a shortage that's driving up prices and causing delays in shipments, executives from three Taiwanese manufacturers said.
The shortfall stemming from the largest recall in the consumer electronics industry's history may last until next June, and customers are waiting an extra two months for shipments, said managers at Gentle Wayeer Electric Co (奇恩電子), ETI Pack Co (竑亮企業) and Nexcell Battery Co (耐能電池), which make packs from cells supplied by Tokyo-based Sony and competitors such as Sanyo Electric Co.
Sony, the world's second-largest rechargable battery cell maker after Sanyo, is replacing lithium-ion packs after computer makers including Dell Inc found that some burst into flames. A shortage of the batteries, used in electronics ranging from laptops to handheld music players, might dent sales during the year-end shopping season.
"It's very critical now, not just for notebook computers but every other application," said Peter Hsueh, a general manager at Taipei-based Gentle Wayeer.
Rival battery makers including Sanyo and Samsung SDI Co don't have the capacity to fill the orders, the executives said. A typical one-month wait for shipments is taking three months, they said. Four to eight cells are used in one notebook battery.
"If we ask for small amounts, we might be able to get supply, but if we order large amounts of more than 2,000 cells then you can forget about it," said Eric Lai, manager at Hsinchu-based Nexcell Battery.
Last month, Round Rock, Texas-based Dell expanded its recall to 4.2 million laptop batteries, while Toshiba Corp sought the return of 830,000 cells. The number of Sony-made batteries being replaced is 8 million since August.
Apple Computer Inc, Lenovo Group Ltd, IBM Corp, Fujitsu Ltd and Hitachi Ltd also announced battery-replacement programs.
Prices for battery cells have risen about 15 percent in the past three months because of the shortage, the three Taiwanese battery makers said.
More increases may come this quarter, said Cheng Uei Precision Industry Co (正崴精密), which supplies notebook batteries to Sony, Dell and Hewlett-Packard Co.
"Prices will increase around 10 percent in the fourth quarter," said Linda Ho, a sales manager at Taipei-based Cheng Uei.
The company is facing a shortage of battery cells, she said, without giving details.
Sony is destroying 43 million cells as part of the recall, said Eric Yu, a manager at ETI Pack, indicating a disposal of as many as 10.8 million batteries. He's been asked by suppliers to accept higher prices on previously ordered batteries.
"If I say no to a price rise, maybe there will be no supply next month," ETI's Yu said.
Sanyo, based in Osaka, made 42 million battery cells a month last quarter, while Sony manufactured 27 million, according to the Institute of Information Technology in Japan. Samsung SDI Co of South Korea, the third-largest producer, made 26 million cells a month, according to the estimates.
"We originally bought 30 percent of our battery cells from Sony but have lowered that to almost zero because of quality concerns," said J.D. Chen, a sales manager at Celxpert Energy Corp (加百裕工業), a local battery supplier to firms including Hewlett-Packard and Acer Inc.