Japan's earthquake disrupts already fragile tech sector

Shutdowns in factories put crunch on weakened supply chain

Wednesday's 7.3 magnitude earthquake off the coast of Fukushima, Japan, caused the temporary shutdown of some major manufacturers, including chip and component-makers Murata, Renesas and Kioxia, in addition to broader manufacturing companies in the area.

Fujitsu told The Register that while no injuries had been reported, some damage was documented at its Fukushima Prefecture manufacturing facility.

"We have confirmed some structural damage at parts of the site," said a Fujitsu spokesperson, who added that operations were suspended and safety checks were underway. "The plant will resume operations as soon we complete this check."

According to Nissan, the night shift at the Iwaki Plant was stopped the night of March 16th and all employees were evacuated.

"There are no injuries to our employees and no damages impacting production at our facilities, and production resumes today. We will continue to monitor the situation," a representative from Nissan's global communications department told The Register.

Multiple reports have claimed Murata, one of the world's top suppliers of ceramic capacitors, had suspended operations at four factories. One of the factories producing chip inductors, the Tome Murata factory in Miyagi, reportedly experienced a fire that was extinguished around 2am local time. The other Murata factories said to have been shut down were the battery factory in Fukushima and those in Hongu City and Sendai City. We have asked the firm for comment.

Meanwhile, Renasas, which has had its share of unfortunate events – including a blaze at a Japanese factory that affected 17 fabrication machines last March, operates three factories close to the epicenter of the quake: the 300mm Naka Factory in Ibaraki Prefecture that supplies semiconductors to the auto industry globally, the Takasaki Factory in Gunma Prefecture, and Yonezawa Factory in Yamagata Prefecture.

Renasas said operations at all three factories were halted. While two still remain shut, Yonezawa has partially resumed production for some test lines as of Thursday morning Japan time. Among the three factories, there was only one injury, a "minor bruise," said Renesas.

"We are assessing the impact of the earthquake on our overall supply chain," the company added.

Auto-parts maker Hitachi Astemo has also reportedly stopped operations at seven factories while it inspects facilities for damage.

Toyota told Bloomberg that its factories in Iwate and Miyagi Prefectures had been suspended late Wednesday, with a limited capacity already back up by late Thursday.

Like many end product manufacturers, Toyota already faced challenges from COVID-induced supply chain issues. On Thursday, the company announced a three-month "intentional pause" from April to June and a reduction of its global production plan for April from 800,000 units to approximately 750,000 units, with the caveat it might even produce fewer.

"Most of northeastern Japan is a production center for global upstream semiconductor raw materials," said tech analyst Trendforce. But luckily, most of the memory and semiconductor companies remained relatively unscathed from the earthquake, said the research firm.

One company Trendforce said unfortunately didn't escape unscathed was Kioxia, whose K1 Fab in Kitakami faces a possible downgrade to 1Q22 production. The earthquake damaged the facility's wafer input, caused a shutdown and may be slow to recover, said Trendforce. The K1 fab accounts for around 8 percent of the company's 2022 production capacity. ®

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