Live from Japan: Facilities struggling to ramp on power, supply chain disruptions

Longtime semiconductor exec Takeshi Hattori continues his reporting on the aftermath of the massive Japanese earthquake and tsunami, updating the status of facilities and the struggles to ramp production in the face of rolling blackouts (hint: overnight operations) and major holes in the supply chain. See Part 1 of his Japan quake reporting here.

March 22, 2011 – The supply chain is being disrupted by the 3/11 earthquake in Japan, and the disruption may spread globally by the on-going disasters.Click to Enlarge

Sony, Canon, Xerox, Toyota, Honda, and many other companies’ factories nationwide survived without any damage by the earthquake and tsunami — but have stopped their production due to difficulty of procuring materials and parts from many smaller suppliers in eastern Japan, many of which were damaged by the earthquake and tsunami. Only rescue vehicles can use the highways between Tokyo and the Tohoku District, and the Sendai Airport was severely damaged by tsunami. There has been severe shortage of fuels in the district, so the transportation of materials and parts is another issue.

Continuing scheduled rolling blackouts in Kanto Plane (Tokyo, Kanagawa, Yamanashi, Tochigi, Gunma Chiba, Saitama, Ibaraki, and Shizuoka Prefectures) by Tokyo Electric Power Company (TEPCO) makes continuous fab operations impossible. The central Tokyo area has no blackout because there are many important governmental offices, where there are no big fabs. Tohoku Electric Power Company, Sendai, is also planning similar rolling blackout in Tohoku Districts, but it has not yet applied because there is too much serious damage in the district and electricity demand has not yet come to the peak.

The nuclear crisis continues. Though sea water spray to the nuclear reactors continues by brave Japan defense forces and nationwide fire station officers, the serious situation is on-going and people are very afraid of radiation spreading. The number of dead people by the 3/11 earthquake and tsunami reached 9000 as of March 22 and 10000-20000 people are still missing. Among them are some Americans, including a young American lady teaching English to Japanese kids in a local primary school in Iwate.

Update to facilities impacted:

Canon‘s digital camera manufacturing sites in Oita and in Nagasaki, both on Kyushu Island, cannot be operational this week due to procurement problems. Fuji Xerox’s factories in Niigata and Mie Prefectures can also not be operational due to the same reason.

At Sony Corp. in Tokyo, five fabs including a semiconductor laser plant have damage from the earthquake and tsunami and can not be operational for a while; another five fabs are not operational due to difficulty of materials and parts purchase, though they have no structural damage and ready for operation.

Manufacturing operations at the following Sony manufacturing sites remain suspended due to damage:

  • Sony Chemical & Information Device Corp.’s Tagajyo Plant in Miyagi Prefecture, responsible for magnetic tapes, Blu-ray discs, and other recording media, has very severe damage by both the earthquake and tsunami.
  • Sony Shiroishi Semiconductor Inc., Shiroishi, in Miyagi Prefecture, responsible for manufacturing semiconductor lasers.
  • Sony Energy Devices Corp., two plants n Fukushima Prefecture (Koriyama and Motomiya), both for Lithium ion secondary batteries.
  • Sony DADC Japan Inc., Ibaraki Facility in Ibaraki Prefecture, for CDs and DVDs.

While the following manufacturing sites were not directly damaged by the earthquake and tsunami, the company plans to temporarily suspend certain parts of its manufacturing operations at these sites on and after March 22 through March 31, 2011, depending on the availability of necessary raw materials and components.

  • Sony EMCS Corp.
  • Tokai Technology Center, Kosai Site (Shizuoka Prefecture): Broadcast and professional equipment.
  • Tokai Technology Center, Kohda Site (Aichi Prefecture): Camcorders, digital still cameras, etc.
  • Tokai Technology Center, Minokamo Site (Gifu Prefecture): Lens for digital single-lens reflex cameras, cell phones, etc.
  • Tokai Technology Center, Inazawa Site (Aichi Prefecture): LCD TVs, etc.
  • Sony/Taiyo Corp. (Oita Prefecture): Microphones, headphones, etc.

Sony EMCS’s Kisarazu Technology Center (Chiba Prefecture) for manufacturing a wide variety of consumer electronic products such as Blu-ray disc recorders and home audios is intermittently resuming manufacturing operations on March 22. It had no direct damage caused by the earthquake and tsunami but suspended operations temporarily primarily due to planned power outages; it may have to suspend manufacturing operations temporarily again, depending on the planned power outage situation.

Some fabs of Sony, Fujitsu, and many other companies started overnight operation to avoid TEPCO’s rolling blackouts because they are applied sometime between 6:20-22:00 and never applied in the night time. Some companies try to purchase diesel generators to continue fab operations during the rolling blackout , but the purchase of generators and diesel fuels is difficult due to their shortage.

Toyota Motor Corp. in Toyada, Aichi Prefecture, has decided today that the halt of vehicle production at all the plants and subsidiary vehicle manufacturers nationwide will continue until (and include) March 26 (a scheduled Saturday production day) due to difficulty of procuring automobile parts from many suppliers in eastern Japan, where the 3/11 earthquake epicenter was located.

Meanwhile, TMC resumed production of replacement parts on March 17 and resumed the production of parts for overseas production (including knockdown parts) on March 21.

Toyota’s "Kanban" system, the darling of American business school professors (aka "just-in-time" production), has clearly proven to be very, very weak after every earthquake and disaster. Toyota itself does not have excess stocks, but much smaller suppliers must have many stocks, by their own risk.

Honda Motor Corp. in Tokyo also is extending the suspension of vehicle production at the following plants until March 27: For automobiles, Sayama Plant at Saitama Factory (Sayama, in Saitama Prefecture) and Suzuka Factory (Suzuka, in Mie prefecture ); and for motorcycles, Kumamoto Factory ( in Kumamoto prefecture on Kyushu Island).

Both Toyota and Honda will make decisions of next week operations based on the status of the recovery of transportation systems in Japan as well as the supply of parts.

According to today’s Japanese newspapers, Japan’s supply chain issues will spread to American and French automobile companies, and possibly to Nokia and Apple Computers, among others.

Toshiba Corp.‘s Yokkaichi Plant in Mie Prefecture, which has five fabs for NAND flash memory volume manufacturing, was again attacked by another earthquake: a Magnitude 6.4 on the evening of March 15 (21:32), with epicenter in Shizuoka Prefecture, much nearer than the of the 3/11 earthquake. Several pieces of wafer processing equipment inside the cleanrooms automatically stopped operations, but were recovered by the next morning. The plant managers are now making survey of supply chain issues, but some issues are anticipated for materials procurement to be used in production. The plants are producing more than 40% of NAND flash memories used in the world and huge amount of materials are necessary for production continuously.

Iwate Toshiba Electronics, Kitakami in Iwate Prefecture, Toshiba’s wholly own subsidiary for logic and SoC chips, has structural damage on building ceilings, walls, and air conditioning systems, and wafer processing equipment shifted on the floor. It will take a few weeks to recover and fix the problems.

Toshiba’s headquarters in Tokyo has been devoting all efforts day and night to make safety countermeasures to the still-uncontrollable nuclear crisis. The company is one of the major suppliers (GE, Toshiba, and Hitachi) of nuclear reactors to TEPCO’s Fukushima Daiichi Nuclear Plant. Some 700 nuclear engineers are presently working toward the serious problem solutions at the TEPCO plant site in Fukushima or in Toshiba’s Nuclear Engineering site in Yokohama. The other 150-200 Toshiba engineers are working toward recovery of heat power plants of both Tokyo and Tohoku Electric Power companies damaged by the earthquake and tsunami.

Toshiba Mobile Display, Fukaya, in Saitama Prefecture, a supplier of small and medium-sized LCD panels, has damage (mainly equipment shifts) and has not be operational since March 11. It is not clear when the headquarters plant will become operational. The firm has another plant in Ishikawa Prefecture and plans to increase LCD production there.

Hitachi Display Ltd., Mobara in Chiba Prefecture (formerly known as the Mobara Factory of Hitachi Ltd.), a manufacturer of LCD panels, has structural damage of the ceiling of rooms in the buildings and manufacturing equipment shifts occurred on the floor. It will not be operational till sometime in April.

Renesas Electronics, Tokyo: Its Naka factory, Hitachi Naka in Ibaraki Prefecture (formerly Hitachi’s LSI manufacturing base) and Takasaki factory, Takasaki in Gunma Prefecture are not yet operational. Renesas Yamagata Semiconductor, Tasuruoka in Yamagata Prefecture (formerly NEC’s LSI volume-manufacturing base) is partially operational but full operation will be difficult as far as scheduled rolling blackouts continue.

Takeshi Hattori, president of Hattori Consulting International, has more than 36 years experience in the semiconductor field. He spent over three decades at Sony, including work in silicon materials (clean surface prep, thermal oxidation, contamination/defect control). He was head of Sony’s Ultra Clean Technology Research Lab involved in development of single-wafer spin cleaning and surface preparation technologies, non-aqueous and supercritical-fluid cleaning, and yield enhancement strategies. He is a Fellow of the Electrochemical Society, founding member of the International Symposium on Semiconductor Manufacturing, member of SEMI’s Japan regional standards committee and SEMI/SEAJ Forum, and The Confab advisory board, among many others.


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