Supply Chain
Japan disaster impacts supply chain
The aftermath of Japan's earthquake lastmonth has left the electronics supply chain struggling with production stoppages and shipment delays of electronic components and rawmaterials supply By Gina Roos
While the devastation fromthe earthquake and tsunami in northeastern Japan onMarch 11 is immeasurable in terms of its impact on the country's people and psyche, Japan also faces a nuclear power plant crisis, rolling power outages, and a crippled transportation system, all of which are having a devastating impact on Japan's people and economy. The aftershock can be felt throughout the electronics industry supply chain as manufacturers try to assess the full extent of the damage.
Delays or complete stoppages in the production of electronic
components are due to several reasons ranging frombuilding and/or equipment damage to power outages and logistics issues. Components affected includememory devices, in particular DRAMs and flashmemory, logic ICs, capacitors and inductors.
Initial reports frommarket research firmTrendForce indicated
that a power outage caused production to shutdown silicon wafer fabs at Shin-Etsu Semiconductor and SUMCO. Both companies also suffered damage to their production lines.
Shin-Etsu is a major wafer silicon supplier to DRAMsuppliers
Hynix, Elpida and Rexchip. However, DRAMeXchange reported that Hynix's demand can be met by other plants and suppliers, and both Elpida and Rexchip, which get a large share of supply from the impacted plants, have started to negotiate raw wafer purchases from other vendors. Both have one month of inventory level.
Samsung andMicronwill not be impacted by the potentialwafer
shortage. According to DRAMeXchange, Samsung has five other raw wafer suppliers in the U.S., Japan and Korea,whileMicron's supply comes primarily fromthe U.S.
Overall, Taiwanese DRAMsuppliers are not impacted by the raw
wafer shortage. The latest reports fromIHS iSuppli reveals the shutdown of
operations at Shin-Etsu Chemical Co. Ltd.'s Shirakawa facility and MEMC ElectronicMaterials Inc.'s Utsunomiya plant, together, has
28 | April 2011
impacted 25 percent of the global production of siliconwafers used tomake semiconductors. This could have amajor impact on the industry since both companies supply domestic Japanese demand and global semiconductormanufacturers, said IHS.
The Shirakawa facility produces large 300-mmwafers,which are
used inmore advanced semiconductors that have high transistor counts, and aremainly used inmanufacturing flashmemory and DRAMs, said IHS. As a result, the global supply ofmemory semiconductorswill be impacted themost severely of any segment of the chip industry. Logic devices represent the next largest use of thesewafers, according to IHS.
Shin-Etsu's Shirakawa plant,which is responsible for 20 percent
of global silicon semiconductorwafer supply, told IHS itwould set up production systems at other facilities but did not knowhowlong itwould take to restore the damaged facilities and equipment.
MEMC's Utsunomiya facility,which accounts for 5 percent of
worldwide semiconductorwafer supply, evacuated employees and suspended operations at the plant after the earthquake, and expects that shipments fromthis facilitywill be delayed in the near term, said IHS.
As a result of the potential rawwafer shortage, PC OEMs have
increased their DRAMinventory level for future demand, according to DRAMeXchange. This led to higher contract prices inMarch. The DDR3 2-GB contract price increased by 3.03 percent from$16.50 to $17 ($0.91/Gb)while DDR3 4-GB increased by 3.13 percent from $32 to $33.
rawmaterials production suspended
More bad news for the supply chain includes the shutdown of raw materials production at two Japanese companies --Mitsubishi Gas Chemical Company Inc. and Hitachi Kasei Polymer Co. Ltd. --which account for 70 percent of theworldwide supply of themain raw material used tomake printed circuit boards (PCBs), reported
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www.electronics-sourcing.com
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