Two Weeks Before Supply Chain Problems Hit

Up till then, suppliers’ inventory should keep things ticking over. Customer inventory, in these days of just-in-time deliveries, is not expected to be a factor.

The worry is that unforeseen post-earthquake problems like transportation difficulties and power outages are actually making matters worse.

Yesterday Sony announced the closure of five more factories on top of the eight it closed immediately following the disaster.

The reasons given for the new Sony closures was difficulty in getting supplies. The company said that if supply problems and power outages look like persisting, it may move production abroad.

TSMC’s CEO, Morris Chang, says the company is looking for non-Japanese materials suppliers. .

A quarter of the world’s raw wafer production is now turned off as a result of a cessation of operations at Shin-Etsu’s Shirakawa plant and MEMC’s Utsunomiya plant Shirakawa makes 20% of the world’s raw silicon wafers and MEMC’s Utsunomiya plant makes 5% of the world’s wafers.

Even if wafers are in stock, re-starting fabs is being delayed by aftershocks – every time a tremor tops five on the Richter scale, the equipment turns off automatically

No one’s going to start up a fab with that hanging over them.

Renesas, Fujitsu, Rohm, ON, Sanyo, Toshiba, Texas Instruments and Freescale have also report interruptions to electricity supplies.

No one’s going to re-start a fab if there’s a danger of that happening.

TI reckons its Miho fab may not re-start until July. It used to supply a tenth of TI’s total revenue.

Other problems reported are difficulties in getting raw materials, distribution, shipping product and employee absences because of transportation disruption.

It is expected that Japan’s Q2 economic output figure will move down. No one knows how long it will be before it moves up again.