Two prominent research firms have released new data this week that shows the widening impact on components and materials owing to the earthquake that struck Japan on March 11.
Analysts at DisplaySearch published an update on the shortage of materials affecting the flat panel display (FPD) industry, while market researcher IHS iSuppli cited the impact on silicon wafer production in a research note. Sony and Toshiba are also offering updates on production facilities that have been affected.
"In the second week after the Japan earthquake, some additional impacts to the FPD supply chain are beginning to emerge," DisplaySearch said in a note sent out today. "In the near term, some panel makers need to work with new material suppliers to keep their lines running. Longer term, there are some indications that key equipment production may be delayed."
Display production equipment: "[Production] equipment for Gen 4 and smaller fabs [fabrication facilities]...is dominated by Nikon. The company makes steppers in its Miyagi facility, which was damaged. A statement on the company website announced that the facility is closed with no indication of when it will resume operations. Nikon was at full production capacity before the disaster and had a great deal of work in process. Thus, it seems highly likely that shipments for AMOLED (active-matrix organic light-emitting diode) and LTPS (low-temperature, poly-silicon) LCD fabs will be delayed. If so, the current tight supply would continue longer than initially forecast. Gen 5 and larger fabs use projection lens scanning exposure equipment, which may also experience some delays as there are numerous sub-assemblies that must be produced and put together to make the complete machine." (DisplaySearch)
NF3 (nitrogen trifluoride) gas and ITO (indium tin oxide): NF3 is used in cleaning chemical vapor deposition (CVD) chambers in the production of thin-film transistor (TFT) liquid crystal displays (LCDs), semiconductors, and amorphous silicon thin film solar cells. ITO is the main type of transparent conductor and is widely used in TFT LCDs and touch screens. Japanese companies have 30 percent and 70 percent of the world supply of NF3 and ITO, respectively. "Reports from some panel makers indicate that the supply of NF3 is tight due to the earthquake and the unstable electric power supply in Japan...JX Nikko's factory [that makes ITO] is located 80 Km from the Fukushima nuclear power plant, and is currently shut down." (DisplaySearch)
Pigments: these "are used in color filters. DIC, a Japanese supplier of organic pigments, has indicated that its production has been impacted, which could have an [impact] on the supply of green pigments for color filters." (DisplaySearch)
Connectors: these "are used for the power and graphics signals in LCD modules made by Hirose and JAE [and] may be in short supply due to the earthquake." (DisplaySearch)
In most of these cases, panel makers are holding at least a few weeks of inventory, giving them some time to locate alternative sources, DisplaySearch added.
Market researcher IHI iSuppli said on Monday that the Japanese earthquake had resulted in the "suspension of one-quarter of the global production of silicon wafers used to make semiconductors."
Silicon wafers: "Manufacturing operations have stopped at Shin-Etsu Chemical Co. Ltd.'s Shirakawa facility. MEMC Electronic Materials Inc. also stopped manufacturing at its Utsunomiya plant. Together, these two facilities account for 25 percent of the global supply of silicon wafer used to make semiconductors. Wafers are thin slices of silicon that serve as the substrate of semiconductor devices. All semiconductors are built on wafers," iSuppli said.
The iSuppli report continued. "The facility in question Shirakawa facility produces large 300mm wafers, which are used in more advanced semiconductors that have high transistor counts. The wafers made by this facility mainly are used in the manufacturing of memory devices, such as flash memory and DRAM. Because of this, the global supply of memory semiconductors will be impacted the most severely of any segment of the chip industry by the production stoppage. Logic devices represent the next largest use of these wafers."
Supply will be impacted around the world, according to iSuppli. "These companies supply not only domestic Japanese demand for wafers but also semiconductor manufacturers around the world. Because of this, the suspension of operations at these plants could have wide-ranging implications beyond the Japanese electronics industry. A 25 percent reduction in supply could have a major effect on worldwide semiconductor production."
Raw material for printed circuit boards: "In another development for the global electronics supply chain, two Japanese companies announced they have stropped production that amounts to 70 percent of the worldwide supply of the main raw material used to make printed circuit boards (PCBs). PCBs are used in all electronic products, from PCs to smart phones, to digital wristwatches. The companies, Mitsubishi Gas Chemical Company Inc. and Hitachi Kasei Polymer Co. Ltd., said they will resume production within two weeks of the raw material called copper-clad laminate (CCL)." (iSuppli)
iSuppli continued. "However, with current inventory levels, IHS iSuppli believes that there likely is sufficient supply of finished PCBs and raw CCL material to keep electronics production lines running at global electronics manufacturers, as long as the interruption doesn't last significantly longer than two weeks."
Sony: The Japanese electronics maker has updated its status. Plants that had halted production due to power failures or the impact of the tsunami then resumed partial production include Sony Energy Devices (Tochigi Prefecture ), which makes lithium ion batteries.
And Sony factories that have been shut down due to repair and/or maintenance include Sony Energy Devices (Fukushima Prefecture)--a facility that also makes lithium ion batteries.
Production was also temporarily shut down due to power outages at Sony EMCS (Chiba Prefecture) that manufactures Blu-ray disc and home audio systems. Production is planned to resume.
Toshiba: The electronics manufacturer has stopped production at its facilities in Iwate Prefecture. "[Toshiba is] working with equipment suppliers to restore [supply] by the end of March. We will then start continuous test operations, following recovery of power supply."