SAN FRANCISCO—The electronics industry supply chain is expected to be completely recovered from the after effects of the March 11 earthquake in Japan by the end of the third quarter, according to a report by market research firm IHS iSuppli.
Electronics companies with operations near the epicenter of the quake that suffered building and equipment damage are expected to restore full shipments by early September, six months after the quake, IHS said. The restoration will coincide with the peak season for electronics and semiconductor sales in the third quarter, according to the firm.
Many electronics companies have already fully restored operations after they were halted on the day of the quake. In many cases, restart was hindered by infrastructure damage and rolling black outs. Some restarted chip fabs are still working toward recovering full manufacturing capacity. Both Renesas Electronics Corp.'s fab in Naka and Texas Instruments Inc.'s Miho fab are not expected to recover full production until the end of September.
"In the history of the electronics supply chain, nothing has had such a broad impact as the Japan earthquake, tsunami and nuclear disaster,” said Dale Ford, senior vice president for semiconductor market intelligence at HIS.
IHS noted that the duration of production disruptions experienced by electronics firms in Japan varied depending on the distance from the earthquake's epicenters. Affected companies that were farthest from the epicenter took only one to two weeks to restore production, while companies closest to the disaster could take as long as four to six months to return to normal—depending on their response to the disaster, the firm said.
Ford credited Fujitsu Semiconductor with the most rapid and efficient recovery among all Japanese semiconductor suppliers. Despite facilities close to the epicenter of the earthquake, the company said it had attained full recovery to pre-disaster production levels at five chip plants on June 9, he noted. Ford credit Fujitsu's rapid recovery to a disaster-response strategy implemented by Fujitsu three years ago—following an earthquake in Japan’s Iwate prefecture.
According to IHS, 14 semiconductor suppliers and four silicon wafer makers in Japan were impacted by the quake.
IHS expects global semiconductor revenue growth to hit an annual crescendo in the third quarter, with a sequential rise of 7.4 percent, corresponding with a return to full products in Japan. This compares to a 1.4 percent decline in the first quarter, a 2.9 percent increase in the second quarter and a 3.1 percent rise in the fourth quarter, the firm said.
The only fab I am aware of that is still not running at all is the Freescale fab in Sendai. That fab was supposed to close at the end of this year, anyway. It was also the closest chip fab to the epicenter, something like 65 miles away, and was heavily damaged. The company announced a few months ago that that fab won't reopen and that it was transitioning manufacturing to other sites.
As for the other fabs (TI, Renesas) that are still ramping up, it takes some time from the cold start of a wafer fab (especially one where equipment has been repaired or replaced) to ramp up to full production. They are going through that now.
I wonder what the backlog is for those fabs still not operation at full capacity (or running at all)? I look forward to the fabs all being back online and Japan cleanup efforts completed. Thanks for the update!
This is good news for a lot of companies which depend on chips. Let's see that is pretty much most of the companies out there in the market. Now that they will go to pre-Faukashima days, this will hopefully bring down the prices.