Further news from Japan on technology supply chains

Here's another update from Ian Bowles of Probrand

The Tsunami has damaged production at two facilities in Japan accounting for 25% of the world production of Silicon wafers used in semi conductor manufacturing. Japan and in particular the  area of Japan affected is responsible for some critical components used in electronic manufacturing worldwide.  The  volume of wafer products shipped worldwide since 2005 has grown by about 30% with last years figures at an all time high.   Demand in the 2011 was expected to exceed 2010.

Shipments are for semiconductor applications only; removing 20% of that capacity in the short term will cause product shortages. How quickly other plants can fill the gap or how quickly these plants can be  re-started will have a huge influence on the shipment of  Semi-conductors and thus many other products worldwide in the months to come. The main product produced in these plants is the 300mm wafers.   There are some stocks in the supply chain; they are expected to run down and there will be product shortage starting in April.

The semi-conductor fabrication plants around the world will now be working hard to source wafers to ensure their production can go ahead.

Semi-conductor and PCB production

The area of damage related to the Tsunami will influence a wide range of supplier's ability to build electronic products. A resin used in Semi-conductor manufacture by approx 40% of the worldwide producers of semi conductors is still in doubt from MGC.

The same plant produces chemicals used in PCB production; one is a cleaning solvent.

The second MGC product is critical in PCB manufacture.  MGC and HKP  have shut down production at their plants that make 70% of the world’s supply of copper-clad laminates.  This is one of the critical raw material used to make printed circuit boards.   Production is forecasted to resume within two weeks assuming there are no more problems discovered in the plant fabric, plus the utility / power sources and raw material supply line are both stable.  The plants will have been out of action for nearly 4 weeks at this stage.

Starting production in early April should mean limited impact on production of PCBs.  But there will be a number of very nervous Procurement teams watching the status of these two plants and their ability to produce their products based on their importance in the electronic supply chain.

Iain Bowles has been in the IT industry for several decades and has visited the area hit by Tsunami over 80 times in a previous role as sales & marketing director at Fujitsu.   Established in 1992, Probrand is a major supplier of top branded computer products. It provides ICT through traditional and online channels (www.theITIndex.co.uk).

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