When we think of great fires, the Chicago Fire (1871), the Great Fire of London (1666), or perhaps the recent fire at Notre Dame (2019) come to mind. If you care about high-performance audio, by now the fire you have probably heard and thought about the most is the foundry fire that happened in October at AKM Production Center No. 2 in Nobeoka, Japan. Ablaze for 82 hours, this fire has already disrupted the high-end pro and consumer audio industry more than Covid 19. AKM made over 80 different parts in this fab, which included parts used in not only the audio industry but also in other electronics sectors like the camera and smartphone industries. Unfortunately, there are companies that will struggle to find a viable substitute for AKM parts, and the inevitable scarcity of new parts will certainly cause some products to vanish indefinitely from the marketplace.
As many of you know, we are big fans of AKM converters. In our view, they are absolutely the best choice for every performance target we have. However, as much as a good DAC or ADC module relies on the quality of the converter, it also relies on the supporting circuitry and layout. In some cases, we will be using converters from other companies and they will still be very good, but probably not as good as the AKM derived ones. Although we have a limited stock of AKM parts to use into 2021, the phrase "beggars can't be choosers" comes to mind as we move forward in finding a temporary replacement.
We have been using AKM ADCs, DACs, and codecs for many years. We have a very good relationship with AKM staff. The fire has placed them in a horrible situation, and we are fortunate that they have been upfront with us in regard to the development of this dilemma.
We have gotten many questions from our customers about how we are coping with this situation and what our status is going forward. Fortunately, we were made aware of the fire early, which allowed us to buy large amounts of some components from our US distributors. We also had some parts already booked and in the shipping queue before the fire. Could we use more? Absolutely! No one really plans for a year of safety stock.
Danville is committed to being a reliable partner with our OEM customer base. Fortunately, we have a few strengths that help in this regard:
• We are vertically integrated. Engineering and manufacturing are internal operations that are closely coupled. This means that we can strategically control the flow of critical parts in a timely manner.
• We have a good stock of materials for most of 2021.
• We have the time and ability to redesign some products without disrupting production.
So, we will surely all get through this in time. It may take a while but AKM is a great company and they will be back.