The Japanese earthquake has apparently suspended 25 percent
of the global production of silicon wafers, according to a new report from
research firm IHS iSuppli. Those wafers are used to craft semiconductors, which
has far-reaching implications for high-end enterprise hardware such as PC,
server and IT storage systems, as well as consumer products like smartphones
and tablets.
The epic scale of the damage has the potential to force
slowdowns in the manufacture of consumer products. On March 17, IHS
iSuppli also reported that Apple could face difficulties meeting demand for the
iPad 2, which includes components apparently sourced from Japanese
companies.
Shin-Estu Chemical Co. Ltd.’s Shirakawa facility, along with
MEMC Electronic Materials Inc.’s Utsunomiya plant, have stopped manufacturing
operations in the wake of the March 11 earthquake and subsequent tsunami. The
Shirakawa facility specializes in 300-millimeter wafers used in advanced
semiconductors with high transistor counts, used primarily in the manufacturing
of components such as flash memory.
“These companies supply not only domestic Japanese demand
for wafers but also semiconductor manufacturers around the world,” reads IHS
iSuppli’s March 21 research note. “Because of this, the suspension of
operations at these plants could have wide-ranging implications beyond the
Japanese electronics industry.”
Two companies, Mitsubishi Gas Chemical Company Inc. and
Hitachi Kasei Polymer CO. Ltd., also announced that they had halted production
of the raw material used to build printed circuit boards (PCBs), effectively
curtailing some 70 percent of the worldwide supply. Production will apparently
resume within two weeks.
“With current inventory levels, IHS iSuppli believes that
there likely is sufficient supply of finished PCBs and raw CCL material to keep
electronics production lines running at global electronics manufacturers,”
reads the firm’s note, “as long as the interruption doesn’t last significantly
longer than two weeks.”
The earthquake’s potential effects on the worldwide
electronics industry have been detailed for weeks.
“Japan remains a leading producer of NAND flash, CMOS Image
Sensors, ASICs, and DRAM,” analysts at Deutsche Bank wrote in a March 15 report.
“Given the disparate location of Fabs and the impact of rolling power outages,
it is difficult to estimate the impact on semiconductor production. However
within our coverage universe SanDisk has the most exposure with 100 percent of
its front-end facilities in Japan (through Toshiba JV).”
Market research firm Objective Analysis claimed March 11
that more than 40 percent of the world’s NAND flash memory chips and 15 percent
of global DRAM supplies hail from Japan. Flash is the main memory component in a
variety of mobile products such as tablets.
Although a few companies reported their facilities were
undamaged by the earthquake, a combination of employee absences, transportation
and shipping problems, and electricity interruptions could all contribute to a
slowdown or stoppage in manufacturing.
According to IHS iSuppli, iPad 2 components sourced from
Japan include Toshiba NAND flash, DRAMs from Elpida Memory, system battery from
Apple Japan, and an electronic compass from AKM Semiconductor.
In the wake of the earthquake, Apple called off the iPad’s
scheduled Japan rollout, declining to set a new date.
/ 11 
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