LONDON – It is still hard to find out the state of a number of wafer fabs in the prefectures closest to the massive earthquake, and resulting tsunami that hit Japan Friday (March 11).
Normally factories, which are built to withstand earthquakes in the area, suffer little damage and the worst that happens is a loss of work in progress. However, the magnitude of the quake--which measured 8.9 on the Richter scale--may have been significant enough to damage factories. Re-establishing electricity and water supplies and transportation links may take many days.
As well as being a significant manufacturer of chips, Japan holds a key position in the semiconductor equipment and materials supply chain, which could have a bearing on chip manufacturing factory operations in the rest of the world. Japan is a major player in LCDs, solar and other products.
According to market research firm IHS iSuppli, Japanese suppliers accounted for more than one fifth of global semiconductor production in 2010. Japan also accounted for 16.5 percent of global consumer electronics equipment factory revenue and 6.2 percent of the world's production of large-sized LCD panels in 2010, according to the firm. Japan also accounts for a very high share of components used in LCD panels and LCD-based products, including glass, color filters, polarizers, cold cathode fluorescent lamps and light-emitting diodes, according to IHS iSuppli.
Needless to say, Japan is critical to the worldwide electronics supply chain. ''Over 40 percent of the world's NAND flash and roughly 15 percent of the world's DRAM are manufactured in Japan,'' said Jim Handy, an analyst with Objective-Analysis.
''Japan is a significant source of chips to support consumer electronics devices. A two-week shutdown would remove from production a sizable share of each of these. It doesn't take a large production decrease to cause prices to increase dramatically. Objective Analysis anticipates phenomenal price swings and large near-term shortages as a result of this earthquake,'' Handy said.
''Demand will be impacted as well since many electronics manufacturers are in Japan, and their consumption of semiconductors will be halted until earthquake damage is repaired,'' he said.
''The biggest current problem in Japan is that the transportation network is down and that there were power outages. Fabs that don’t have backup power and lost power, even if the transportation network was up, will be down for half to a full week. The other problem is that tool suppliers are in the same situation as emergency rooms in these natural disasters. Service resources are limited, and that constrains a recovery,'' said G. Dan Hutcheson, CEO of VLSI Research Inc.
Japan has many chip and fab tool vendors. Tokyo Electron Ltd. (TEL) has a plant in Miyagi. Nikon Inc., a leading supplier of lithography equipment, has manufacturing operations in Sendai and in Katta-gun, Miyagi prefecture. Miyagi Nikon Precision Co., Ltd. makes components for inclusion in LCD and IC steppers. A prolonged interruption there could impact the current strong sales of equipment and slow down expansion of global chip manufacturing capacity during 2011.
Shin-etsu a leading supplier of silicon wafers does not have any major manufacturing plants in the north of Japan but does have a number of factories in the Gunma region northwest of Tokyo.
Meanwhile, at least two U.S. chip makers were impacted. Texas Instruments Inc.'s Miho and Aizu sites and its Tokyo offices were affected by the initial magnitude 8.9 earthquake, according to TI. Employees at these sites were evacuated, and no injuries were reported. A fourth TI site in Hiji was not affected. TI has about 2,100 employees in Japan.
No other details were given. TI has a fab in Aizu. TI recently bought the fab from Spansion Inc. Following the devastating earthquakes and tsunami in Japan, TI initiated support of American Red Cross relief efforts. The Texas Instruments Foundation announced contributions of as much as $250,000 for the American Red Cross Japan Earthquake and Pacific Tsunami Fund. A $100,000 donation will be made initially, with another contribution of as much as $150,000 to match employee and retiree gifts through May 15, 2011.
"We were able to act quickly to provide an easy and effective way for compassionate TI employees and retirees around the world to give and support the relief efforts," said Trisha Cunningham, TI chief citizenship officer, in a statement. "Our hearts go out to the families and communities in Japan."
Another chip maker, On Semiconductor, has approximately 6,000 employees in Japan. This includes Sanyo Semiconductor, which was recently acquired by On Semi. ''We have confirmed that there have been no on-site injuries to our Sanyo Semiconductor and On Semiconductor employees in Japan. Initial reports are that no employees have been injured outside of the workplace,'' according to On Semi.
On Semi's Aizu, Japan-based 6-inch production facility ''has reported no power loss and limited physical damage to the facility,'' according to On Semi. The Niigata fab, owned by Sanyo, ''had no power failure. The site was evacuated as a precaution but operations have been restored. Initial reports are of limited damage to the facility.''
Sanyo's Gifu ''wafer fab had no power failure. Fab lines are ok and running. Initial reports are of limited damage,'' according to On .''The Gunma (leased production from Sanyo Electric) manufacturing facility has reported power loss. Production impact will be assessed when power and communications are restored. The Kasukawa (leased from Sanyo Electric) and Hanyu (Sanyo-On Semiconductor owned) back-end facilities have reported building damage. Official inspection is underway but has not been completed.''
Japanese chip makers are still assessing the impact of the quake. Fujitsu Ltd. issued the following statement. ''As of 6:00 pm JST, there have been no reports of any injuries that have been sustained by our Fujitsu employees from the earthquake that hit northern and central Japan today. There have been reports of slight damages to our buildings and power outages; however, there have been no reports of any severe damage. We are currently confirming whether this disaster has affected our regular business operations.''
''We are assessing the situation'' in Japan, according to a spokeswoman from Toshiba America Electronic Components Inc. ''As with any significant disaster, much information is coming in piecemeal and unconfirmed. TAEC is working with other affiliates and Toshiba Corporation to sift through the information to determine what can be accurately reported. When confirmed information is available, we will provide it.''
There were signs of a fab power outage, however. ''Currently, there are indications that the Iwate factory has been affected by a power outage. All factories are being inspected for damage,'' she said. ''In addition to delivery interruptions that may arise from factory damage, shipments of product may be affected by disruptions in road, rail, sea, and air transportation within and from Japan.''
A spokeswoman from Renesas Electronics America Inc. said: ''Some of our facilities are located in Northern Japan. Right now, our team in Japan is checking on damage that may have occurred to our facilities. As aftershocks are frequently occurring, our priority right now is to ensure the safety of our employees and carefully assess the status of any damage.''
Flash memory vendor SanDisk Corp. said in a statement that the epicenter of the quake was approximately 500 miles from Yokkaichi, the location of two fab joint ventures between SanDisk and Toshiba. "Both fabs were down for a short period of time due to the earthquake and were back up and operational as of Friday morning, Pacific Time," SanDisk said.
There were no injuries to SanDisk employees based in Japan, SanDisk said. "SanDisk’s current assessment is that there has been minimal immediate impact on wafer output due to the earthquake," the statement said. "SanDisk continues to assess the situation for any potential future impact that may arise from issues related to Japanese infrastructure and the supply chain."
One fab tool vendor, TEL, issues the following statement: ''Initial reports from TEL indicate that none of our employees have been injured in today’s earthquake and tsunami incident. Over the next few days, we will be assessing any potential impact to our factories.''
On March 4, an accidental fire destroyed construction materials at TEL’s new Miyagi plant in Taiwa-cho, Miyagi Prefecture. While the extent of the fire damage was limited, TEL ''has deemed it necessary to postpone the beginning of operations at the production building, originally scheduled for April 2011, in order to ensure a flawless production environment.''
As of March 4, TEL said it would maintain the current production line at Tokyo Electron AT Limited’s Miyagi Plant (Matsushima-machi) and expand the production areas of the Yamanashi Plants (Nirasaki City).The development and office buildings are still scheduled to begin operation in April as initially planned.
ATE vendor Advantest Corp. of Japan issued the following statement: ''At this time we are still awaiting a full assessment of the earthquake's impact on Advantest and its facilities. Initial information out of Japan reports no known injuries to Advantest staff, and little to no damage at our facilities. Clearly, this is a tragedy of epic proportion for Japan and its people, and our hearts and minds go out to all of those injured or suffering. We thank you for your concern and will put out updates when available.''
Map showing location of 300-mm fabs in vicinity of the quake, which was centered 80 miles off the coast near Sendai. The purple marker on the northwestern coast is a Renesas Electronics fab in Yamagata.The highest purple markers on the eastern coast are the location of Renesas' Naka fabs in Ibaraki and a facility operated by the Selete consortium. There are several other fabs in the region processing wafers at 200-mm and below, operated by the likes of Freescale, Texas Instruments, Toshiba and others. A larger map showing the location of 300-mm fabs in Japan and South Korea can be found here. Source: SEMI, Google Maps.
-- Dylan McGrath contributed to this story from San Francisco.