How much??

As a follow up to one of our earlier stories about Sony factories and the Japanese earthquake and the April 6th press release Sony delivered the following update. Note the comment in conclusion that indicates that manufacture has been halted by a lack of ability to move raw materials and components between Sony group companies.

Scary stuff. Currently the stall in manufacture of Sony tape stock is having immediate consequences for anyone that would like to purchase new tapes, and as I said in the previous post, HDCAM SR tape stock has the most impact for TV production. The obvious consequence on everyone’s mind is price. Distributors have jacked the price way up to deal with the demand as existing productions scramble to secure HDCAM SR stock.

The Hollywood Oracle did some research and our sources tell us that since the earthquake in Japan, a standard 64 minute HDCAM SR has soared from around $83.00 to nearly $200.00! Due to the uncertainty that studios and facilities around town will be able to replace their dwindling inventories, some are charging as much as $280.00 to keep clients from hoarding.

Below is the release from April 28th:

Status of Sony Group Manufacturing Operations Affected by
the East Japan Earthquake, Tsunami and Related Power Outages

(Tokyo, April 28, 2011) — Sony Corporation (“Sony” or the “Company”) today updated the status of Sony Group manufacturing operations affected by the March 11 East Japan Earthquake, tsunami, and related power outages, as of April 28, 2011.

As of March 14, 2011, operations at ten Sony Group sites and facilities had been suspended as a result of damage caused by the Earthquake, tsunami and related power outages. As of today, manufacturing operations at nine of these ten sites have resumed or partially resumed, and at the remaining site, Sony Chemical & Information Device Corporation’s Tagajyo Plant in Miyagi Prefecture (“Tagajyo Plant”), plans are in place to resume its manufacturing operations.

Although the Tagajyo Plant sustained significant earthquake and flooding damage caused by the tsunami, as a result of extensive restoration and repair efforts, the site’s core manufacturing operations are now expected to resume. Optical disk manufacturing operations, including Blu-ray, are expected to resume around the end of May 2011, and magnetic tape manufacturing operations are expected to resume around the end of July 2011. Manufacturing of other products and components previously carried out at the Tagajyo Plant will be transferred to Sony’s core manufacturing facilities for these products and components located in Miyagi, Fukushima and other prefectures, in order to quickly restore full production capacity.

Following the resumption of operations at the Tagajyo Plant, Sony plans to coordinate with the appropriate local authorities to consider how the Company can continue to assist with regional recovery efforts, for example by offering vacant building space at the Tagajyo Plant to businesses in the area, and assigning employees to assist with local support activities.

As announced on April 6, 2011, Sony continues to respond to fluctuations in material or component supply from time to time by adjusting production levels at certain domestic and overseas manufacturing sites that were not directly damaged by the Earthquake and tsunami. Sony will continue to monitor the availability of raw materials and components and endeavor to improve such availability. For any products affected by adjustments to production levels, the Company also plans to take further measures as necessary, including reallocating available materials and components among Sony Group companies, using alternative components and expanding procurement channels in order to restore full production capacity as early as possible.

The Company is continuing to evaluate the full impact of the Earthquake, tsunami and related power outages, including the impact of these production level adjustments, on Sony’s businesses and consolidated financial results.

Next time we examine the situation from the stock distributor perspective. Look for the follow up post at Hollywood Oracle.

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