Effects of earthquake to be felt throughout electronics industry
1 min read
With the situation in Japan becoming clearer, it seems a number of key fabs are shut and won't be back in production for many weeks. An example is Renesas, the world's leading supplier of microcontrollers, where five fabs are out of action – representing half of its capacity.
Market watcher IHS iSuppli reported last week that it had detected signs of panic buying of electronic components following the Japanese earthquake. There has been, it claimed, a surge in orders as manufacturers attempt to have the necessary parts to hand.
This may work for the short term – the industry has been sustaining higher than normal inventories. In the longer term, component supplies will be impacted.
It's not just chips themselves, there is the possibility the supply chain to fabs could be impacted. Japan is a leading supplier of the resins and speciality chemicals used in electronics manufacture and produces 60% of the silicon ingots used to make wafers. And there could be further problems if manufacturing equipment is damaged; Japan is a leading source of such tools.
It is possible that some production could be reallocated to other fabs, but utilisation – the measure of how busy fabs are – has been at more than 90% for a while, which means there's little spare capacity.
Putting all this together and factoring in the pervasive nature of electronics means the effects of the Japanese earthquake will be felt everywhere and for some time.
