Manufacturers Claim Sony Recall Will Cause Battery Shortage, Price Increases Until June

According to a story in Bloomberg, representatives from three Taiwanese manufacturers are saying that the recall of approximately 8 million Sony Corp. Li-Ion batteries used in notebook computers has created a shortage that is resulting in price increases and delayed shipments. The representatives (from Gentle Wayeer Electric Co., ETI Pack Co., and Nexcell Battery Co.) represent companies that make packs from cells supplied by Sony and other companies. They told Bloomberg that the global recall of Sony's batteries has resulted in a shortfall of product that may last until June of 2007, and that their customers are having to wait an extra two months for shipments.

Sony, the world's second largest rechargeable battery cell maker behind Sanyo, is reportedly destroying 43 million cells as part of their recall program. To gain some perspective on the sheer volume of the cells being destroyed: Sanyo produced 42 million battery cells a month during the last quarter, while Sony produced 27 million, and Samsung produced 26 million. The Taiwanese company representatives claim that prices for battery cells have risen 15% due to the product shortage which began after Sony's recall troubles were "ignited" in August. They are reporting that they are being asked by suppliers to pay higher prices on previously ordered batteries, and that they are expecting this situation to result in price increases as much as 10% for the fourth quarter. The representatives also speculate that the the shortage and price increases will have negative economic repercussions beyond the notebook sector of the battery market.