LONDON – The production of microcontroller ICs – and therefore everything from automobiles to washing machines to consumer gadgets and industrial controls and on to medical equipment – is likely to be "severely" affected by the Japanese earthquake and its aftermath, according to equity research firm Nomura Securities Co. Ltd.
"The earthquake’s impact on microcontrollers is severe," Nomura told clients in a note issued Friday (March 18). What severe means in terms of missing production as a percentage of past levels was not elaborated.
Nomura said that the closure of a wafer fab belonging to Renesas Electronics in the affected area north of Tokyo was likely to hit the production of microcontroller ICs in particular.
Renesas, the world's fifth largest chip company and its largest vendor of microcontrollers has lost approximately half its production capacity. The Renesas campus at Naka is without power and the company has not yet started to assess damage there. The company has a 300-mm wafer fab that made system LSIs and a 200-mm wafer fab that made microcontrollers.
Texas Instruments Miho wafer fab was also severely damaged and Nomura analysts consider that wafers could not be run there before mid-May with the implication that full production could not start until mid-July which means that shipments of packaged chips could not start until September.
Separately, Texas Instruments said its wafer fab in Miho produced only digital light projection chips and some analog ICs and that the status of TI's Miho wafer fab will have no bearing on TI's production of microcontrollers.
Nomura said two other wafer fabs that made microcontrollers and ASICs in Iwate prefecture operated by other companies were closed and this contributed to the severity of the situation. While even those companies affected badly by the earthquake have other wafer fabs, either elsewhere in Japan or overseas, transferring processes and designs may not be possible and some applications, for example automotive, require detailed certification of the production by the customer. This can make manufacturing transfers, where possible, as prolonged a process as bringing up stricken wafer fabs, which is likely to be the chip companies' primary concern, after they have ascertained and done what they can for the safety and well-being of their staff and their families.
I believe while it may cause a short supply in the immediate short term the other Fabs would ramp up production and even some fab work might be outsourced depending on library support and cost effectiveness.
But the worry is how it might affect the consumer market which is sensitive even to supply variations of a couple of months. It would certainly give some unaffected suppliers a good deal of bonus revenue in these time when the cost escalates.
Junko: our love to your country and people. We wish Japan quick recovery and blessings. A good people and we pray that God will help rebuild Japan.
on micro-controllers, I think the risk model across the globe is being reassessed based on what natural disasters can do. I am just confused how a mortal will wake up the next day and decide to rebuild. But the human spirit is beyond silicon.
good point...and yet, it appears nobody, even those living in quake-prone areas, appears to have imagined his country is hit by a disaster of this magnitude.
I am particularly interested in learning how those running production lines are dealing with lack or power, or rolling blackouts.
It is indeed a sad day for the Japanese and helps others realize just how small and connected the world really is. What I am most interested in is: what steps will be needed to ensure that another disaster does not cause massive disruptions in the production of ICs (whether in Japan or elsewhere)? I would hope that both the IC and production manufactures would be looking ahead..
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