Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Japan's Quake Cuts Into Supplies of Raw Materials Used in Chips

After more than than a week of gathering anecdotal reports about shortages here and there, the research firm IHS iSuppli has concluded that 25 percent of the world’s supply of silicon wafers used to make chips has been been suspended by the effects of the earthquake and tsunami in Japan.

Manufacturing has stopped at Shin-Etsu Chemical Co. Ltd.’s Shirakawa facility, and MEMC Electronic Materials has stopped manufacturing at its plant in Utsunomiya. Together, the two facilities account for a quarter of the global supply of silicon wafers, the basis of building chips.

The Shin-Etsu Chemical plant by itself supplies about 20 percent of the world’s silicon supply, and it specializes in making 300-millimeter wafers, which are the dinner-plate-size discs of silicon used in the more advanced chip factories, commonly referred to as fabs. Shin-Etsu, iSuppli says, supplies several memory chip manufacturers, particularly those that make flash memory, used in everything from iPhones to memory cards, and also DRAM, the main memory used in PCs and servers. ISuppli says the global market is going to be hit hard, which in turn means you can expect prices on both flash and DRAM to soar. Shin-Etsu has said it would set up production at other plants, but it’s hard to know how long that will take.

MEMC’s Utsunomiya facility accounts for five percent of worldwide wafer supply. MEMC said it expects that shipments from this facility will be delayed during the near term.

In a related note, iSuppli has quantified the impact of the shutdown of operations at Mitsubishi Gas and of Hitachi Kasei Polymer. The two companies produce about 70 percent of the world’s supply of the raw materials used to make printed circuit boards. The key material in question is called copper-clad laminate or CCL. The two companies say they’ll be able to ramp production back up within two weeks. The good news is that electronics manufacturers have enough circuit boards in inventory that they can probably keep their operations running without interruption.

ISuppli goes on to check in on a few chip companies in the affected region: Elpida Memory says its fab in Yamagata has been damaged, and the lack of electricity is hurting production. It’s running at about half its normal capacity.

The quake also damaged about 40 percent of the production capacity of Renesas Electronics. Production has stopped at its Tsugaru fabs where it makes analog and discrete chips, at its Naka fab where it makes system-on-chip and microcontrollers, and at its Takasaki and Kofu fabs, which also making analog and discrete parts.

Half of Fujitsu’s production capacity has been damaged. While its fabs and wafer equipment are intact, the lack of power, gas and wafers have slowed things down considerably, and it expects to recover in about three to four weeks.

One company that is holding up well: AKM Semiconductor, notable for the compass chips it produces for Apple that are used in the iPhone and iPad 2. Its main production fab in Nobeoka is well out of the quake zone and hasn’t suffered any loss of power.

Latest Video

View all videos »

Search »

I’m a giant vat of creative juices.

— David Pogue on why he’s joining Yahoo