Chipmaker Texas Instruments Inc said on Monday that “substantial” damage to one of its major manufacturing plants near Tokyo in last week’s earthquake would result in extra costs and lost revenue in the first half of this year.
The Miho plant, which produces mostly analog chips, but also makes digital light processing technology used in televisions and projectors, won’t return to full production until mid-July.
It handled about 10 percent of the semiconductor company’s output by revenue last year. A second plant was damaged less severely.
The Dallas-based company has arranged to shift about 60 percent of Miho’s production of silicon wafers to other plants. The company is looking to shift even more production. Texas Instruments didn’t estimate the hit to revenue or the extent of costs in the first and second quarters. It will provide details when it reports first-quarter results on April 18.
The plant, located 64km northwest of Tokyo, will be returned to service in stages beginning in May. Full shipments will resume in September. That plan could be delayed if power is interrupted or other complications ensue. Japan began rolling blackouts to conserve power on Monday as it tried desperately to stabilize nuclear reactors at risk of meltdown in the aftermath of the earthquake and tsunami.
Texas Instruments said the building is sound, but warned that it would take about three weeks to repair systems for delivering chemicals and other supplies. Goods under production were damaged, although the company said it could salvage about 40 percent.
A second plant, at Aizu-wakamatsu, about 240km north of Tokyo, was not as heavily damaged. The company said equipment is being restarted and full production is estimated by the middle of next month. A third plant about 804km south of Tokyo escaped damage and is running at normal capacity.
Japan accounts for one-fifth of the world’s semiconductor production, including about 40 percent of flash memory chips used in everything from smartphones, tablets to computers.
Prices for key technology components extended gains yesterday, as damage at Japanese plants and infrastructure caused by Friday’s devastating earthquake and tsunami threatens to disrupt the global manufacturing chain longer than many had expected
Research firm IHS iSuppli said the quake and its aftermath could result in significant shortages of some electronic parts and lead to big price hikes.
“While there are few reports of actual damage at electronic production facilities, impacts on the transportation and power infrastructure will result in disruptions of supply, resulting in the short supply and rising prices,” iSuppli said. “Components impacted will include NAND flash memory, dynamic random access memory [DRAM], microcontrollers, standard logic, liquid-crystal display [LCD] panels and LCD parts and materials.”
Spot prices of NAND flash chips extended their gains yesterday, rising nearly 3 percent after a 20 percent jump on Monday, while DRAM memory chip prices gained 0.2 percent on top of a 7 percent on Monday, according to price tracker DRAMeXchange.
Even if shipments of semiconductor parts affected by the quake were disrupted for only two weeks, shortages and their price impact were likely to linger until the third quarter, iSuppli said.
Demand for NAND flash memory chips has been surging, led by mobile devices and tablets such as Apple Inc’s iPad 2, which is estimated to have sold almost 1 million units during its weekend debut.
Toshiba Corp, which supplies about one-third of the world’s NAND flash memory chips, said it was still inspecting its System LSI factory in Iwate, the only one halted by the quake and tsunami and could not say when it might re-open.
The factory produces microprocessors and image sensors.
Canon Inc said it may not be able to resume production at three factories making office equipment and lenses used in audio-visual players this week.
Sony Corp also said its eight factories making equipment ranging from optical devices, IC cards, blu ray discs, chip equipment and lithium batteries remained closed, with no guarantees on resuming date.
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