A Wall Street Journal article (Dec 10, 2010) described a 0.07 second power interruption at Toshiba’s Yokkaichi plant. The level of this power interruption was beyond anything planned for, thus causing a shut down of equipment and a potential 20 % drop in shipments over two months, as reported in the article.  The chips at the plant are used in cameras, cellphones etc and demand for the chips were reported to be surging. How will the supply chain adjust – will prices rise for competitors such as Samsung’s chips or will they hold prices steady to maintain relationships with customers ?  Will customers change designs to use other chips ? What are lessons from this event for the future ? Is excess capacity now justified in this industry as a hedge against such disruptions or will an increased focus on yield improvements be a more competitive alternative ?