March 25, 2011
Smith MarketWatch Bi-Weekly
Trends and Issues Affecting the Electronics Industry
To address the potential supply chain disruptions to electronics manufacturers resulting from recent events in Japan, we offer this MarketWatch Bi-Weekly Special Edition. This and future frequent Special Editions will summarize the latest supply chain-related developments from components manufacturers and industry and financial analysts.



While the production status of Japanese electronic component manufacturers is of obvious importance to the electronics supply chain, the impact of the events in Japan on suppliers to those manufacturers is another critical link in the supply chain.  These suppliers support component manufacturers around the globe – not just in Japan – so their status can have wide importance.

  • As much as a quarter of the world's raw wafer production may be offline as a result of idled operations at Shin-Etsu’s Shirakawa plant and MEMC’s Utsunomiya plant, according to iSuppli. Notably, Shirakawa, which alone makes 20 percent of the world’s raw silicon wafers, produces 300mm wafers, which is expected to particularly threaten memory production.  Company status reports do not project a date for resuming production. View update
  • Mitsubishi Gas Chemical (MGC) and Hitachi Kasei Polymer report that they will resume production within two weeks of copper-clad laminate (CCL), used in PCBs. The two companies account for 70 percent of total world production.  Current inventory is expected to cover the interruption in supply for the next couple weeks. View update
  • MGC, also the world’s largest producer of bismaleimide-triazine (BT) resin, has taken its BT resin production offline with no word as to when it will resume.  BT resin is a material used to make substrates that connect chips used from handsets to PCBs.  MGC produces about half of the world’s BT resin supply. 
  • Several materials used in the production of displays have been earmarked as potential weaknesses in the supply chain for display manufacturers:  supply of NF3 (Nitrogen Trifluoride)gas, used in cleaning CVD (Chemical Vapor Deposition) chambers in the production of TFT LCD, semiconductors, and amorphous silicon thin film solar cells is reported to be tight due in part to damage to plants producing the gas in the earthquake affected region.  A transparent conductor, ITO (Indium Tin Oxide), is widely used in TFT LCDs and touch screens. JX Nikko, a supplier of raw material used in ITO, is currently shut down.  DIC, a Japanese supplier of organic pigments used in color filters, has indicated that its production has been affected, which could have an impact on the supply of green pigments for color filters.View update

Manufacturer Information

Recent posting by specific manufacturers include:

Fujitsu -- On March 23, EETimes reported that “Operations partially resumed Wednesday at the Fujitsu Integrated Microtechnology Ltd. (FIM) plant in Miyagi prefecture, Fujitsu said. Operations have also partially resumed at the FIM semiconductor testing facility in Aizu-Wakamatsu-shi, Fukushima prefecture, according to the company.” Manufacturing remains halted at three Fujitsu front-end fabs, including Fujitsu Semiconductor Ltd. plants in Iwate prefecture and Fukushima prefecture, as well as the Fujitsu Semiconductor Technology fab in Fukushima prefecture.   View update

Renesas -- Reported as of March 24, seven of the eight affected facilities have partially restarted or are preparing to restart production. The Renesas Electronics Corporation, Naka Factory in Hitachinaka-shi, Ibaraki has temporarily halted production as only partial electricity has been restored. Renesas has started assessing the status of inside the clean room at the 200mm wafer fabrication line, in addition to the 300mm line. View update

TDK -- Reported that as of March 24, the TDK Micro Device Corporation Plant in Kitaibaraki-city, Ibaraki, has not yet resumed production. The details of damages have become clear and are currently under analysis. It will be possible next week to forecast the schedule for production resumption. View update

Rohm -- Reported that as of March 23, the industrial water supply has not yet been fully restored at the OKI Semiconductor Miyagi facility. The restart of the operation is underway; as soon as the infrastructure is reestablished, operations will be resumed. At the ROHM Tsukuba facility, partial operations began on March 19, and they continue efforts for an April 1 restart. View update

Smith's global team has created information maps to show the Japan earthquake's impact on suppliers of semiconductors; aluminum caps; passive; electromechanical; and magnetic components.

Major Developments in the News

Some ships avoid Tokyo Bay ports on radiation fear
3/24/2011 - via Reuters

German shipping companies are avoiding Tokyo Bay area ports due to radiation fears and Japan could face severe supply chain bottlenecks as vessels get diverted, ship industry officials said on Thursday.

Supply chain: too lean, too mean, too late now
3/18/2011 - via EETimes Europe

Analysts are trying to think through the implications for global manufacturing of the lost and damaged production of materials, equipment and ICs in Japan as a result of the devastating earthquake of one week ago. Despite some differences of opinion it is becoming increasingly clear that the world will now be asked to pay a price for the past globalization of the electronics industry.

Supply chain disruptions force more delays in Japan
3/23/2010 - via Reuters

Supply chain disruptions in Japan have forced at least one global automaker to delay the launch of two new models and are forcing other industries to shutter plants and rethink their logistical infrastructure.

NAND supply to be 30% down in May, says JP Morgan
3/23/2010 - via Electronics Weekly

The supply of NAND flash will be down around 30% in two months time, according to investment bankers JP Morgan.


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