Japan Earthquake Shakes Chip Industry: Impact on Local Firms

It was reported that a magnitude 7.6 earthquake occurred on the Noto Peninsula in Ishikawa Prefecture, Japan on the afternoon of January 1. The Japan Meteorological Agency also issued tsunami warnings for Ishikawa, Fukui, Niigata, Toyama, Yamagata and other places. As the earthquake caused damage to roads, bridges and other infrastructure in many places in Japan, it is reported that the factory operations of important manufacturing companies such as Toshiba and Murata Manufacturing Co., Ltd. were also affected. 

The crystal growth process in raw wafer manufacturing is particularly sensitive to seismic activity, but most of Shin-Etsu's crystal growth business is in the Fukushima area, so the impact of this earthquake is limited. Global Wafer said on Wednesday that two of its five factories in Japan are in earthquake-stricken areas. The company said that after a brief partial shutdown on January 1 and 2, production has fully resumed without any damage. 

Toshiba's Kaga factory is southwest of Ishikawa Prefecture. It has one six-inch and one eight-inch factory, and a 12-inch factory that will be completed in the first half of 2024. Toshiba said on Tuesday it had closed a factory operated by subsidiary Kaga Toshiba Electronics, a key production center for power semiconductors. The company said it has not yet decided when the plant will restart. 

Two Japanese manufacturing plants of Israeli semiconductor foundry Tower Semiconductor are in neighboring prefectures of Ishikawa. Tower Semiconductor said the building was not affected or damaged, while the facility sustained only minor damage with no impact on operations. “We are recertifying the tools while working to effectively repair any damage to fab tools and in-line materials and utilizing all available resources to minimize any potential disruption to manufacturing and customer service.” 

According to The Register, Murata Manufacturing Co., the world's largest manufacturer of multilayer ceramic capacitors, is also assessing damage to facilities at two locations near the epicenter. According to TrendForce news, Murata (only the MLCC factory) experienced an earthquake intensity below magnitude 4 without being significantly affected. However, Murata's other factories that do not produce MLCC are in areas with earthquake intensity above 5 and were closed during the New Year holiday while staff assessed the damage. 

Currently, Taiwanese semiconductor companies that have built factories in Japan, including TSMC, United Microelectronics, and Power Technologies, have also sounded the alarm. Taiwan's analysis agency investigated and analysis on six major industries, including wafer foundry, silicon wafer, memory, packaging and testing, equipment testing, and passive components. Among them, Sanchong County, where UMC USJC is located, had the highest earthquake magnitude of 4. Others include TSMC, Licheng , ASE, Hong Kong, Taiwan Jiashuo and other related Taiwanese manufacturers, the earthquake intensity at the daily production base is mostly within level 2, the impact is slight, and it is not even possible to rule out the benefit of transferring orders. 

TrendForce believes that considering the current downturn and off-season of the semiconductor industry, coupled with the existing parts inventory, and the fact that most factories are in areas with earthquake intensity of 4 to 5, preliminary investigations indicate that the equipment has not been significantly damaged, and the impact of the earthquake is expected to be control.