MARCH 21, 2011, 5:10 PM
Sizing Up the Silicon Problem After the Quake
By STEVE LOHR
Plant shutdowns in Japan have halted production in factories accounting for 25 percent of the world’s silicon wafers used to make computer chips, according to a report released Monday by the research firm IHS iSuppli.
Shortages of silicon-wafer supplies from Japan have been shaping up to be a big potential problem. In an article on Sunday about the challenge the Japan disaster poses for global supply chains, we highlighted the plant shutdown at the largest silicon wafer maker, Shin-Etsu Chemical Corporation, and quoted a company official saying on Friday that the “continuing violent aftershocks” at Shirakawa plant made even inspections difficult. Companies based in Japan account for an estimated 60 percent of silicon wafers, and key operations are in Japan.
What the IHS iSuppli report adds is a plant-level analysis. The Shin-Etsu plant, according to IHS iSuppli, produces 20 percent of the raw wafers used by semiconductor makers worldwide.
Another shuttered wafer factory in Utsunomiya, owned by MEMC Electronic Materials Inc., accounts for 5 percent of global wafer supply, the report said.
This is how the industrial effects from the disaster in Japan are really going to become apparent — by gathering more information about individual industries, and parts and components, down to the plant level.
Assuming IHS iSuppli’s analysis is on target, the silicon wafer problem may well cascade through the computer and electronics industries, if the shutdowns stretch for weeks or months. The supply shortage, wrote Dale Ford, an IHS ISuppli analyst, “could have a major impact on worldwide semiconductor production.”
The semiconductor category hit hardest, the report said, will be memory, including flash memory. Flash memory is used in electronics products like digital music players, smartphones and tablet computers, including Apple’s popular iPods, iPhones and iPads.
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