Japan: Production of semiconductors threatened - March 16, 2011
They are essential to the operation of computers, cell phones, tablet PCs or even cars and many household appliances. The semiconductor industry is the subject of much concern since the earthquake and tsunami that devastated Japan. The country provides its own 1/5th of world production, 40% of flash memory on the planet. The flash memory can retain data stored over a long period (several years) without being powered by electricity instead of computer memories (RAM) for example.Cheaper to produce than the RAM, energy efficient, compact flash memory replacing hard drives often for devices requiring a small storage space.
According to iSuppli research institute, the components affected by the disaster include NAND flash memory, DRAM, microcontrollers, LCD displays LCD and LCD components and materials.
In dozens of factories in Japan, production is stopped. Toshiba, which supplies a third of NAND flash memories in the world, announced it has cut the current in all its production plants, thus cooperating with the Tokyo Electric Power Company (TEPCO), which seeks to regulate energy demand. Only the group's headquarters and essential services to its business are always supplied with electricity.In addition, Toshiba semiconductor plant in Iwate in northern Iraq, remains closed without the group is able to predict a date for reopening.
The eight plants Sony have also ceased trading. For its part, Texas Instruments said Monday that production was suspended two of its factories and it would not find their level before the month of July. The group is, however, managed to redirect 60% of its production to other sites.
Transport destroyed
Most is the damage inflicted on the country's infrastructure that threatens the chain of production of semiconductors."While some real damage in the factories producing electronic equipment were reported, the impact [the earthquake] on transport infrastructure and energy will lead to disruptions in the supply chain," iSuppli analysis.
Even when the plants suffered little damage, difficulties accumulate to ship production by sea to source raw materials or even for the workers to go to their workplace. The Japanese government has warned that the closure or destruction of ports, airports and roads would have a "significant" on the country's economic activity.Manufacturers whose factories have been spared by the earthquake suffered power cuts that slow their activity, according to iSuppli, is notably the case of producing components for Panasonic LCDs.
Furthermore, Japan provides over 60% of the silicone used to manufacture semiconductor chips, said iSuppli. If the chain of supply of this substance is also disrupted by damage to the country's infrastructure, other semi-conductors could see production threatened as bipolar transistors and small signal.
A shortage of parts or components is expected, "which could raise prices or to delay production of our favorite gadgets, Engadget Cares, specializing in new technologies.
Two weeks stock
But the supply of semi-conductors should not miss before the end of the month: "The global supply chain has about two weeks stock of semiconductor components affected by the earthquake," said iSuppli. This is the case, for example, the South Korean manufacturer Hynix memory chips and Taiwanese Wintek, which manufactures the module iPad Touch 2. This does not prevent the two companies begin to seek other suppliers in South Korea or China.
The shortage has not be good news, prices have already begun to soar following the announcement of the stoppage of the plant in Iwate Toshiba, the price of 32-gigabit NAND has jumped 20% Monday and another 3% on Tuesday.DRAM, for their shares jumped 7% on Monday.
Meanwhile, the Japanese government tries to reassure investors: the Japanese Minister of Finance Yoshihiko Noda said that the markets fell in response to "transitory factors". "The production and economic power of Japan are not on the ground," said his side Economy Minister Kaoru Yosano.
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