Disruptions to global electronics supply chain following Japan's quake!

IHS iSuppli held a seminar to discuss "How Big of a Threat to the Global Recovery and Key Industries Is the Disaster in Japan and the Turmoil in the Middle East and North Africa?".

One of the participants, Dale Ford, senior VP, IHS iSuppli, presented on the "Disruptions to the electronics supply chain", following Japan's quake!, where he pointed out that those companies close to the epicenter of the earthquake would need as much as four to six months to return to normalcy!

Ford listed equipment and building damage, infrastructure damage, electricity, water and roads, as well as workforce disruption, and safety, food and gas as the areas mainly impacted.

The time for full shipment restoration ranges from one to two months, on to four to six months for the areas impacted most, especially, equipment and building damage.

Now, it is well known that Japan plays a major role in the global electronics supply chain. Japan offers 20.8 percent of global production. It supplies 60 percent of the worldwide silicon wafers. Its TFT LCD panel capacity equals 12 percent of the world supply. It is also said to be a leader in battery technology and production.

The key component and material production facilities currently closed in Japan include:

Silicon production
a) Kamisu, Ibaraki, Shin-Etsu
b) Nishigo, Fukushima, Shin-Etsu
c) Utsunomiya, Tochigi, MEMC
d) Yonezawa, Yamagata, SUMCO

Display manufacturing
a) Hitachi Displays
b) Panasonic LCD
c) Tohoku Pioneer

Semiconductors
1) Aizu Wakamatsu, Fukushima
On Semiconductor (Logic)
Fujitsu (Analog, Discrete, Memory)
Texas Instruments (Analog, Optical)

2) Atsugi, Kanagawa
Mitsumi (Analog, Logic)

3) Goshogawara, Aomori
Renesas Electronics (Logic)

4) Gunma
On Semiconductor (Discrete, Logic)
Renesas Electronics (Analog, Discrete)

5) Hitachinaka, Ibaraki
Renesas Electronics (Logic, Micro, Memory)

6) Iwate
Fujitsu (Micro, Memory)
Toshiba (Discrete)

7) Kofu, Yamanashi
Renesas Electronics (Analog, Logic, Micro)

8) Miho, Ibaraki
Texas Instruments (Analog, Optical)

9) Miyagi
Fujitsu (Logic, Micro)
Rohm (Discrete, Micro)

10) Sendai, Miyagi
Freescale (Logic)

11) Shiroishi, Miyagi
Sony Semiconductor (Logic)

12) Tsukuba, Ibaraki
Rohm (Discrete)

13) Tsuruoka, Yamagata
Renesas Electronics (Logic)

14) Utsunomiya, Tochigi
Matushita (Discrete)

Nariman Behravesh, chief economist, IHS, concluded: “The Japanese disaster will have a large, but (probably) temporary impact on the Japanese economy. However, if supply chain disruptions last a long time, the impact on manufacturing growth in Japan and the rest of the world could become much larger.Assuming oil prices don’t rise much more, the impact on global growth will be small.

"On the other hand, if oil prices rise as high as $150 per barrel, then the global recovery will be threatened.Bottom line: in the most likely scenario, other than Japan and North Africa, growth in much of the world economy will not be derailed! But, the near-term impact on some industries — such as automotive, electronics and chemicals — could be quite painful.”