After the horrifying earthquake followed by the disastrous tsunami, Japan now faces its most serious crisis since World War II. The country is confronted with a cascade of accumulating problems that suggest that radioactive releases of steam from the crippled nuclear power plants could go on for weeks or even months. At least, Tokyo’s stock exchange Nikkei plunged over 6% with start on Monday and ended below 10,000 after the quake: Major carmakers fell across the board on Monday as they were forced to suspend operations at their plants, largely due to shortages of supplies, while construction-linked shares surged on investors' expectations of an increase in demand for rebuilding.
Mitsubishi Motors Corporation (MMC) announced that none of the three production plants located in the southwest part of mainland Japan has been affected by the Tohoku earthquake. But some of MMC's suppliers have reported damages. MMC is suspending plant operations on March 14th (Mon) and 15th (Tue), to prioritize safety verifications at its suppliers.
Of course, not only the car manufacturers are affected – just to exemplarily name some of the semiconductor manufacturers: Renesas Electronics – well known for its microcontrollers – has announced that due to the impact of the earthquake in northern Japan on March 11, and in response to the blackout measure announced by Tokyo Electric Power Company, the semiconductor manufacturer has temporarily shut down production in seven out of 22 of its factories and eight offices in Japan. Among these factories, Renesas Yamagata Semiconductor’s Tsuruoka Factory is currently beginning its startup procedures to restart its manufacturing. The Group is assessing the extent of the status of the remaining six factories.
Texas Instruments said its manufacturing site in Miho, about 40 miles northwest of Tokyo, suffered substantial damage. The company plans to reinstate production in stages, beginning with several lines in May and returning the factory to full production in mid-July, which translates to full shipment capability in September. This schedule could be delayed if the region's power grid is unstable or if further complications prevent the re-start of equipment. TI is moving quickly to shift production to other fabs and so far has identified alternate manufacturing sites for about 60 percent of Miho's wafer production. Work is underway to increase this percentage by moving the production of additional products. TI's fab in Aizu-wakamatsu, about 150 miles north of Tokyo, was also damaged in the earthquake, though equipment there already is being re-started and full production is estimated by mid-April, assuming a stable power supply. The company's third fab in Hiji, about 500 miles south of Tokyo, was undamaged and is currently running at normal capacity.
DRAM manufacturing in Japan accounts for 10 % of the worldwide supply based on wafer production. The two major DRAM fabs in Japan, operated by U.S. based-Micron and Japan’s Elpida, have not been affected directly, since the fabs are mainly located in the south of the main island. Japanese companies, mainly Toshiba Corp., account for 35 % of global NAND flash production in terms of revenue.
Picture: Objective Analysis, March 2011
Japan’s deadly earthquake has impact on semiconductor community
According to a preliminary IHS iSuppli estimate, the major impact on Japan’s semiconductor production is not likely to be direct damage to production facilities, but disruption to the supply chain. Suppliers will have to face difficulties in distributing raw materials and shipping out products. This is likely to cause some disruption in semiconductor supplies from Japan during the next two weeks, stated Jonathan Cassell, Editorial Director and Director, Public Relations of IHS iSuppli.
Despite the economic crisis Japan was facing during the last years, the country is playing an important role in the global semiconductor supply chain. Equipment for semiconductor manufacturing or semiconductor itself or even displays – Japan is one of the key players worldwide: In 2010 the country accounted for 13.9 % of all global electronic equipment factory revenue. This includes manufacturing of all electronic equipment, including computers, consumer electronics devices and communications gear. Japan produced $216.6 billion worth of electronic equipment in 2010, compared to $1.6 billion worldwide.
Japan accounted for 16.5 % of global consumer electronics equipment factory revenue in 2010. The country represented 10.2 % of worldwide data processing revenue in 2010. Also, Japanese suppliers accounted for more than one fifth of global semiconductor production in 2010. Companies headquartered in Japan generated $63.3 billion in microchip revenue in 2010, representing 20.8 % of the worldwide market. While not all of this actual production is located in Japan, a large percentage is produced in manufacturing facilities there.
Japanese headquartered companies in 2010 ranked No. 3 in semiconductor production among the world's major chip manufacturing regions. The Asia-Pacific region outside of Japan was No. 1, the Americas ranked No. 2 and Europe/Middle East/Africa was fourth. Of the 300 semiconductor suppliers tracked worldwide by HIS iSuppli, 39 are based in Japan.
Japan in 2010 accounted for 6.2 % of the world’s $86.3 billion in global production of large-sized LCD panels in 2010, i.e., panels 10-inches and larger in diagonal. The island nation also accounts for 14 percent of LCD TV panel production. The country is home to many higher-generation fabs, including the world’s only 10th Generation LCD fab, operated by Sharp Corp. The IHS iSuppli Japanese display research team has issued a preliminary view that the Sharp fab has not been directly impacted by the quake, given the remote location of the fab. Only one large LCD fab may be in the zone of peripheral impact by the quake. The more important impact may be on Japan’s production of components for LCD panels. Japan accounts for a very large share of components uses in LCD panels and LCD-based products, including glass, color filters, polarizers, cold cathode fluorescent lamps (CCFLs) and light-emitting diodes (LEDs).
Impact on Component Supply and Pricing
The disaster could result in significant shortages of certain electronic components, potentially causing pricing for these devices to increase dramatically, is Jonathan Cassell at IHS iSuppli convinced. Components impacted will include NAND flash memory, dynamic random access memory (DRAM), microcontrollers, standard logic, liquid-crystal display (LCD) panels, and LCD parts and materials. Infrastructure challenges will slow or suspend shipments from Japan during the next two weeks. However, the global supply chain has about two weeks of excess component inventory in the pipeline for semiconductor parts affected by the quake. Because of this, the shortages are not likely to appear until the end of March or the start of April. Just the same, these shortages and their price impact are likely to linger until the third quarter.
While actual shortages haven’t occurred yet, the disaster is already affecting component pricing, due to the psychological impact of the disaster. Pricing for higher-density NAND flash already has climbed by as much as 10 % on the spot market, which buyers use to procure relatively small quantities of parts. However, IHS does not expect price volatility for OEM DRAM customers and it is likely that the average selling price for major OEM customers on the contract market will hold steady for sustained periods of time until the supply chain moves past the infrastructure challenges. Spot-market DRAM pricing also is surging, rising by as much as 7 % since Friday. Contract pricing is holding steady for the time being, but modest increases are likely as contracts are renegotiated.
It is great! I think we will use this information!
Posted by: cycling apparel | 04/29/2011 at 05:16 AM
I do hope Japan manages to bounce back in the end.
Posted by: Cyclist Jerseys Allie | 04/09/2012 at 03:36 PM