Earthquake may disrupt global silicon wafer supply

[gary]

Shin-Etsu Chemical (http://www.shinetsu.co.jp/e/index.shtml) report that one of their subsidiaries, Shin-Etsu Handotai (SEH)
has had to shut down (http://www.shinetsu.co.jp/e/news/s20110312.shtml)its Shirakawa plant due to a lack of electricity and whilst
safetly inspections are carried out. The plant is located in Fukushima prefecture,
close to the epicenter.

This particular plant reputedly manufactures 1.2 million 300mm blank silicon wafers
a month, which accounts for about 22% of the global market.

The wafers form the base material for semiconductor manufacturer and are at the
heart of every integrated circuit.

Reporter Tony Huang with DIGITIMEs research in Tapei reports that -


Story here -
http://www.digitimes.com/news/a20110314PD211.html

Those in the electronics industry might recollect the period after July 1993
when the Sumitomo epoxy resin plant (http://findarticles.com/p/articles/mi_m0EKF/is_n1971_v39/ai_14145152/)in Japan burnt down. At the time,
this one plant had been producing 60% of the world's epoxy resin for
integrated circuit packaging. The event lead to supply chain shortages in the
electronic industry for quite some time.

[wavelandscott]

I suspect that there will be similar stories coming out soon. There are many things (and parts of things) still made in Japan many of which are used in China to make other stuff...

With respect to the second part of your post...that is my company. Some of that production has moved outside of Japan. In addition to many Agriculture and Household/Mosquito Pesticides we make a lot of IT materials too...in particular stuff that makes the "i" gear and related mobile phones. We also makes lots of other stuff. As of this morning our facilities were still operational but logistics snarls are the next big headache...manufactured materials don't do much good if you can't get them shipped from the factory.

[gary]

Hi Scott,

As you note, undoubtedly more of these type of stories will arise across
various industry sectors.

In the semiconductor business, about 25% of the global IC fab plant capacity is
in Japan.

So if you consider wafer production as one step in the chain and then
the next step is chip manufacture, then there are two steps to begin with that
may be impacted.

You can also actually go further up the chain before wafer production and consider
the equipment that goes into making wafer and IC production and their inspection
and many of the key players are in Japan.

As reported, many plants and offices are shutting voluntarily as part of the
power saving measures Japan is having to take.

Another one to watch for will be large LCD panels where Japan produces 14% of the
panels used in TV's but more importantly, the components for LCD panels, such as
glass, filters, etc, which still largely comes out of Japan and which are then shipped
to Korea to fabricate the LCD panels themselves. So in other words, even Korean
production of TV's could be disrupted.

I am not sure if you were working for them then, but the '93 Sumitomo fire
was one of the most disruptive events in the semiconductor business I can recall
apart from the DRAM wars.

[wavelandscott]

That was the year I started with the company...I did not hear much about it as I was working in the Agriculture Sector at the time. I've learned a lot about the reach of our company since then.

For instance, we also manufacture EPI wafers (to order basically) in the US, China and Japan to start the whole process. Interesting stuff! We also supply a fair number of IT materials into the LCD segment and high end batteries. A really cool area that may come good in the future are PLEDs (Polymer Organic Light Emitting Diodes)...the early stuff looks very promising.

Cheers,