Japanese Companies Struggle With Earthquake Recovery
Many different electronics companies have been hurt by the tragedy in Japan. According to IHS iSuppli, there has been a significant impact on the supply of silicon wafers, which are used to make all kinds of chips, from memory to processor.
IHS iSuppli reports that the Japanese earthquake has resulted in the suspension of one quarter of the global production of silicon wafers used to make semiconductors. This is mostly due to the suspension of production at Shin-Etsu Chemical’s Shirakawa facility and MEMC Electronics Materials’ Utsunomiya plant. This factory alone is responsible for 20% of global silicon semiconductor wafer supply.
The continued aftershocks are disrupting chipmaking facilities. “Earthquakes ranging from 4 to 7 on the Richter scale will make it impossible to really restart these fabs until the earthquakes stop happening with such frequency,” said Dale Ford of IHS iSuppli. “Every time a quake tops 5, the equipment automatically shuts down.”
Texas Instruments reports that one of its fabs sustained physical damage that will put it out of operation or at least limit it for three to six months. The precision equipment in any of these fabs is nearly built to-spec and not likely to be quickly replaced. And re-certifying a repaired or completely different production line takes quite a bit of time and includes getting key customers to validate the qual.
Also affected is the supply of raw materials used to make printed circuit boards (PCBs). Mitsubishi Gas Chemical and Hitachi Kasei Polymer produce 70% of copper-clad laminate, and both companies were affected by the disaster.
“We plan to make our production capability ready from the beginning of May to cover the requirement of BT materials for semiconductor package substrates up to the same level before the earthquake hit.” Mitsubishi Gas Chemical announced on March 29. The company also stated that risks regarding the procurement of raw materials and limited electric power supply may cause changes in the plan.
Hitachi Kasei Polymer announced on March 25 that all of its production sites have been restarted or will restart within a week, with the exceptions of Namie Hitachi Chemical, which manufactures carbon products, and Namie Japan Brake, which manufactures automotive parts. There is no clear timeframe for the resumption of production. IHS iSuppli reports that enough materials are already in the global supply chain for it to withstand this suspension, as long as it doesn’t last for too much longer.
IHS iSuppli also analyzed the effect of the earthquake and tsunami on production of Apple’s iPad 2. The research company reported that five parts of the tablet are from Japanese vendors: NAND flash by Toshiba, dynamic random access memory (DRAM) by Elpida Memory, the electronic compass by AKM Semiconductor, the touchscreen’s glass overlay sheet, which iSuppli says is “likely” by Asahi Glass, and the tablet’s battery, by Apple Japan.
“While some of these suppliers reported that their facilities were undamaged, delivery of components from all of these companies is likely to be impacted at least to some degree by logistical issues now plaguing most Japanese industries in the quake zone,” according to IHS iSuppli. It is not known how deeply Apple will be affected though, because companies like Apple typically have backup suppliers that can step in quickly to make up for shortages or supply-chain disruptions.
Sony is another major company that has been affected by the earthquake. It was forced to shut down operations at six factories that are responsible for disc and drive manufacturing and voluntarily suspended operations at several sites. No significant injuries have been reported at any of these sites. Sony has donated 300 million Japanese yen to help relief and recovery efforts in communities affected. Additionally, the company has suspended operations at several facilities to assist with the alleviation of widespread power shortages.
Nikon was also negatively affected by the earthquake, but is still offering support to the people of Japan. Many of Nikon’s group companies, subsidiaries, and plants suffered damage to their equipment and buildings. It has suspended operations and is further evaluating the damage before it announces when operations will resume. Some of the company’s employees were injured in the quake. In order to assist with recovery efforts, Nikon has donated 100 million yen to the Japanese Red Cross Society.
Apple
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Nikon
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IHS iSuppli
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