Japan Quake Affects AV Manufacturing

[imcarthur]

While certainly a minor consequence of the horrifying events unfolding in Japan, it is looking like the Consumer Electronics industry will see some impact from the closure & slowdowns of plants in Japan.

See Japan Quake Affects AV Manufacturing

"Japan’s chip factories are at the center of the worldwide industry. Approximately 20 percent of all semiconductors and roughly 40 percent of all flash memory chips used in cell phones, smartphones, PC’s, and tablets are made in Japan. As much as China, Indonesia, and other Asian countries have opened chip factories, Japan still reigns when it comes to the manufacturing of the more sophisticated chips, whether for iPhones or for DLP projectors."

And Component Shortages, Price Hikes Expected

"Japan also is the world's largest supplier of silicon used to make semiconductor chips -- at about 60 percent of the global total"

Semiconductor shortages will slow production & will lead to shortages & higher pricing of the electronic gadgets that we are so addicted to.

Ian

[jyl]

Few of the fabs/factories making wafers, semiconductors, discretes, other components were located in the earthquake/tsunami zone. Only a handful of those are actually damaged. More are closed due to power outages. Outside of that area, most are operating normally. Risk is if (1) power not restored in affect zone, (2) power shortages affect rest of Japan, (3) logistics or other disruptions within and in/out of Japan (airports, etc).

Quite a lot of slack capacity in semiconductor wafer manufacturing, and non-Japan is 40-50% of supply. That's not a huge concern to me.

There is a chemical used in making printed circuit boards for cellphones that is 90% supplied by Japan, and 1/2 of that is a company that has one plant damaged and shut down. That's the main risk now. Unknown how much is made by that plant, how quickly they can restart, how quickly manufacturers can switch to alternate supplier, how much buffer invtry in supply chain (maybe 3-5 weeks), which mfgrs and models use which supplier.

Since shortage of one component will take a line down, likely production of some devices is disrupted in the coming weeks and months. But hard to anticipate which ones. Probably more in tradtional CE/AV stuff than in PCs (unlikely much impact there, that supply chain has moved to China/Taiwan for the most part), with handsets the wild card.

[jyl]

A cut/paste

Although Mitsubishi Gas Chemical (a supplier of BT resin used in IC substrates for smartphone baseband chips) has stopped taking orders, QCOM [Qualcomm] notes its “buffer stock” and change in material mix will limit disruptions.

Mitsubishi’s building is structurally intact. However, it is still evaluating the impact on equipment, per an update on the company’s website. Similar to the rest of the supply chain, the ability to obtain power will be a key factor governing the ability to resume production.
substrate makers have about one month of inventory of BT resin . . . substrate makers do have alternatives to BT resin . . . it would take time for those that currently use BT resin to source and qualify products with the new materials.

package substrate makers have about two weeks’ of materials stockpiled, and the materials makers probably also have a few weeks’ worth set aside if they are not damaged. Hitachi Chemical’s facilities are likely to resume operations relatively quickly . . . do not expect a major impact on production, but it shows how this kind of convergence of effects could have an impact on other product areas in the days ahead.

Canon announced that it will suspend operations at its Oita factory for three days due to problems sourcing components.

ONNN [ON Semi] temporarily suspended production at its manufacturing sites in Aizu and Gunma, Japan [Sanyo Semi] due to a disruption in infrastructure services such as fuel, power, water, chemicals, and gases caused by last week’s earthquake. ON stated it is currently assessing options for shifting production to alternate sites, and expects the availability of services to improve late in 1Q11. ON’s four other Japan facilities remain operational, and none of the six facilities sustained major physical damage.

TI [Texas Instruments] reported that its 200mm Miho fab (accounted for 10% of 2010 revenues) was substantially damaged and currently expects manufacturing operations to partially resume beginning in May.

Restoring infrastructure is crucial. While most companies have announced that the damage to buildings and facilities is not severe, many say they are waiting for the restoration of power and the end of rolling blackouts to resume mass-production. Comments indicate that companies expect it will take from several days to a month to restore power.

* Wafer: 60% of raw supply is from Japan. 1 of 4 suppliers is damaged, according to TSM [Taiwan Semi Mfg Co, largest semi foundry], there is enough supply.

* NAND Memory: 40% of supply from Japan [this is Toshiba/Sandisk fabs, in southwest Japan, not affected to date].
* DRAM: 10% [supply from Japan, mostly Elpida and Micron, also southwest Japan, not affected to date], can be addressed outside of Japan, although capacity has been tight.

[kaisen]

60% of the world's silicon is in Japan??
I thought the majority was in Beverly Hills!

[krystar]

60% of semiconductor purity silicon. not raw silicon hehe. silicon's everywhere. in a nutshell, silicon production involves melting sand in a furnace.

[lane912]

i guess wacke siltronic is going to be stepping up a little
Wacker Siltronic Corp (Siltronic Corporation) - Portland, Oregon (OR) | Company Profile

[RWebb]

iPad 2 may be delayed

GM? shut down a car plant in the US (in the South somewhere)

I am wondering if there is any critical component in the e-device supply chain that will be strongly impacted - it's the critical link to look for... not just the % of a major resource.