March 14, 2012 — Japan’s NAND flash memory industry rapidly rebounded from the devastating Great East Japan earthquake and tsunami that hit one year ago this week, says IHS. Strong demand, fortunate fab location, and quick wafer supply replenishment allowed Toshiba Corp. to quickly regain some of its lost market share, according to the IHS iSuppli Memory & Storage Service.
Toshiba is Japan’s only NAND flash maker. The company saw a Q2 2011 impact from the March 11 earthquake off Sendai, Japan, losing more than 6 percentage points of market share in that quarter. Corresponding share increases went to competitors Samsung Electronics Co. Ltd., Micron Technology Inc., and Hynix Semiconductor Inc.
Figure. Global NAND flash memory revenue, market share by quarter (Percentage Share of Revenue in USD).
| Q1’10 | Q2’10 | Q3’10 | Q4’10 | Q1’11 | Q2’11 | Q3’11 | Q4’11 | |
| Samsung | 41.1% | 42.6% | 40.2% | 37.7% | 38.8% | 41.6% | 39.1% | 36.9% |
| Toshiba | 36.1% | 33.4% | 35.6% | 36.6% | 35.0% | 28.7% | 31.4% | 31.1% |
| Micron | 12.9% | 13.4% | 13.7% | 14.8% | 14.6% | 16.0% | 17.0% | 18.8% |
| Hynix | 9.7% | 10.4% | 10.3% | 10.9% | 11.4% | 13.5% | 12.2% | 12.8% |
| Powerchip | 0.1% | 0.2% | 0.2% | 0.1% | 0.2% | 0.2% | 0.3% | 0.5% |
By the next quarter, Toshiba had regained nearly half that share, and dismissed any remaining effects from the disaster as negligible. This made the Japan earthquake disaster a "short-lived" burden on the NAND industry, with several factors lessening its impact on Toshiba and on the market as a whole, said Dee Nguyen, memory analyst at IHS. "Although Toshiba accounted for 35% of global NAND capacity at the time of the disaster, its Yokkaichi facilities [Fab 3 and Fab 4] were far enough from the epicenter to avoid significant damage," Nguyen said. The Yokkaichi fabs only went offline for a week, which spiked NAND spot prices 10-15% but failed to greatly impact average selling prices (ASPs).
There were also enough silicon wafers in the supply chain to sustain Toshiba’s fab operations while wafer suppliers rebooted. While wafer suppliers worked to keep the semiconductor supply chain on track following the March 11 quake, it was difficult for companies to procure raw materials for their production lines in the immediate aftermath. Two of Toshiba’s 300mm wafer suppliers, Shin-Etsu and Sumco, were located in the earthquake-affected area, with damage to their equipment and facilities. By the second week of April, Sumco restarted mass production and ramped additional manufacturing at its other sites. Shin-Etsu, the most significantly quake-affected, restarted production in mid to late April. 300mm wafer suppliers returned to near-normal levels by the end of May 2011.
Toshiba was therefore able to capitalize on the rising sales of storage-intensive tablets, smartphones, and other devices throughout 2011. Combining this steady NAND demand with a supply/demand rebalance brought on by the quake, NAND pricing improved, propelling the industry to 10% quarter-over-quarter revenue growth in Q3 2011.
Toshiba also reported no employee casualties from the disaster, and little to no damage to public infrastructure in the area of its fabs, the buildings, or its power supply. Japan’s government had prioritized electricity consumption to keep facilities like Toshiba’s in operation, mitigating the impact of power outages and minimizing the cost of idle fabs.
In July 2011, Toshiba opened a new fab (Fab 5) on its Yokkaichi campus. In a nod to the post-disaster mindset of Japan, Toshiba’s new facility uses advanced earthquake-absorbing techniques, as well as power-compensation technologies to protect against power disruptions.
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