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Two Weeks after Japan Earthquake, IT Industry Faces Hurdles |
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Martyn Williams IDG News Service (Tokyo Bureau)
Two weeks have passed since a magnitude 9.0 earthquake and subsequent tsunami rocked eastern Japan, and while a recovery among the country's technology manufacturers has begun, it could be several months before things start to normalize.
Many factories were closed immediately following the
quake, and most have been gradually returning to
production in the last week. A handful of plants were
hit harder and could be offline for months.
Companies face a daunting task.
Japan's biggest earthquake ever recorded, and the
tsunami it spawned, left more than 10,000 people dead
and an even larger number missing; several nuclear power
plants remain in emergency condition and continue to
spew radioactive contamination to the environment;
hundreds of thousands are homeless; and the economy is
being forced to adapt to power failures and supply
disruptions. The end of the disaster is still not in
sight.
For IT companies, the loss of production at these plants
could have widespread effects on the electronics
industry.
Texas Instruments' plant in Miho, northeast of Tokyo, is
one of the factories that was hard hit. The plant, which
produced chips and DLP devices for projectors, suffered
"substantial damage" and it won't be until May when
partial production resumes. Full production is not due
until mid-July, and that could be further delayed by
power problems, the company said.
Toshiba estimates production at its mobile phone display
factory in Saitama, north of Tokyo, will be stopped for
a month because of damage sustained in the earthquake.
Further north in Miyagi prefecture, a number of
factories near the quake-hit city of Sendai suffered
high levels of damage.
A Sony plant responsible for magnetic tape and Blu-ray
Discs was inundated with water when a tsunami washed
through the town of Tagajyo and is one of six Sony
plants currently idle. Two Nikon plants were severely
damaged and won't be back online until at least the end
of March. And Fujitsu's major chip plant in Aizu
Wakamatsu is still closed with no estimate of when
production will begin again.
But some of the potentially biggest disruptions could
come from the closure of two plants run by Shin-Etsu
Chemical. Although not a well-known name to consumers,
the company is a major supplier of silicon wafers. One
of the halted plants, its Shirakawa facility in
Fukushima prefecture, is responsible for around 20
percent of the world's supply of such wafers, according
to IHS iSuppli.
"The wafers made by this facility mainly are used in the
manufacturing of memory devices, such as flash memory
and DRAM," said Len Jelinek, an IHS iSuppli analyst, in
a statement. "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."
The knock-on effects of the quake to the global supply
chain are already being felt.
Sony suspended production of Bravia LCD televisions,
digital cameras and other products at five factories far
from the quake zone because it can't get raw materials
and components. Suppliers are unable to deliver because
of either quake and tsunami damage or because of
disruptions to the distribution network.
Industries beyond consumer electronics are also likely
to feel the effects of these problems.
The automobile industry is a big customer of chip
companies and the products it buys are often
custom-made.
"Products like microcontrollers and DSPs can't simply be
swapped out for another chip, whether from the same
vendor or another," said Tom Starnes, an embedded
processor analyst at Objective Analysis in Austin,
Texas. "The programs aren't easily transferable between
processors, and even changing other chips like analog
may introduce cost, quality, or reliability issues not
originally anticipated."
The long-term effect on Japanese electronics
manufacturers and the supply chain remains difficult to
gauge. Several major companies have said they will delay
the hiring of new workers, usually done on April 1, and
some have adjusted or canceled dividend payments to
shareholders. While a nascent recovery appears to be
underway and some factories are coming back online, it
will be weeks before the full extent of damage to the
global IT supply chain becomes clearer. |
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2015
WASEDA - IAC
Digital Government Ranking |
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