Japan Quake Aftermath

March 11, 2011 14:49: Eastern Pacific coast earthquakes occurred

Epicenter : 373km (NE) of Tokyo, underground 24.4Km point

Magnitude : Earthquake close to 9 in the Richter scale occurred  (The largest earthquake ever in Japan, the fifth earthquake on Earth,

Summary of Damage Regions

East coast of Tohoku regions-Aomori, Iwate, Miyagi, Fukushima prefecture- and east coast of Kanto region -Ibaraki and Chiba prefecture were damaged directly (by earthquake and tsunami).

So far over 7,000 lives were lost, over 12000 person unfound, and 300,000 homeless

The loss of communication infrastructure (NTT Docomo, etc.), nuclear power plants, etc.  in the regions and all industrial manufacturing plants shutdown (temporary or provisional), disruptions occurred.

It appears that some infrastructures of the east coast of Tohoku region -Yamagata and Niigata Prefecture- were affected.

Miyagi Prefecture

- Sendai Airport flooding

- Costal towns damage by 10m tsunami

- Large-scale loss of life

- Onagawa nuclear plant , partly fire, partly driving ban

- Sony's 6 factories shutdown (4 factories in Miyagi, 2 factories in Fukushima, Tagajo chemical components (Sony Chemicals) 1st floor flooded

- Murata Manufacturing shutdown (Miyagi and Tochigi Prefecture)

- JX Nippon Oil Factory damage

- Toyota Motor, factory shutdown

Fukushima Prefecture

- Fukushima 1,2,3,4 nuclear plants shutdown and unstable (radioactive spill concern continued)

- Nissan Motor, 6 factories shutdown

- Panasonic factory disruption (Fukuyama Prefecture factory, Sendai factory in Miyagi Prefecture included)

Aomori Prefecture

- Power supply to 4.4 million households stopped

- Pioneer, factory damage (Aomori, Yamagata Prefecture)

- Renesas, factory shutdown

Chiba Prefecture

- JFE Holdings, steel factory fire

- Cosmo Oil, factory fire

Ibaraki Prefecture

-  JSR, factory production stop

- Tokyo Gas, gas supply stop

- Sumitomo Metal Industries, smelting furnace temporary stop

- Daikin Industries,  production stop

- Murata factory was destroyed and his component short ship after the Ipad Production in Foxconn China

Sharp LCD Panel factory shout down and affecting 20% world LCD panel output.

Mitsubishi Gas Chemical Inc. (MGC), Monday that two of its facilities, one in Fukushima prefecture and one in Ibaraki prefecture, shut down due to partial damage to equipment and buildings, Its major product bismaleimide triazine resin, an epoxy resin used in chip making is almost entirely produced by MGC

This shortage of BT would most impact programmable logic vendors Xilinx Inc. and Altera Corp., as well as Qualcomm Inc.  

Sanyo, Sharp and Panasonic have already suspended operations at several of their plants. The brand new multibillion dollar Sharp LED display plant in Sakai, which has been designed to handle earthquakes automatically shut down when the first earthquake, tremor was detected.

Sanyo, Sharp and Panasonic have already suspended operations at several of their plants. The brand new multibillion dollar Sharp LED display plant in Sakai, which has been designed to handle earthquakes automatically shut down when the first earthquake, tremor was detected.

The consequence is many sectors of the Japanese factories would be affected and it may take a few month 3-9 months to resume normal operation.

We foresee that this will force them to think a head seriously for overseas factory volume implementation. They will keep some of their high technology products manufacturing overseas whereas Japan used to keep them locally.

There will be more open opportunity for other overseas countries to gain more exposure for working with Japan to build more Hi end Electrnics and semiconductor products. Whereas more jelly bean products are loaded to overseas.

More Investor will shift more portion of their investment into Korean Electronics giants like Samsung and LG!

HK Snob

Semiconductor material Supplier Chain breakdown After Japan Quake

One of the potential problems for the semiconductor industry resulting from supply disruptions in the wake of last week's Japan earthquake could be shortages of bismaleimide triazine resin, an epoxy resin used in chip making. The resin is almost entirely produced by Mitsubishi Gas Chemical Inc. (MGC), Monday that two of its facilities, one in Fukushima prefecture and one in Ibaraki prefecture, shut down due to partial damage to equipment and buildings. The rolling blackouts currently in force in the region may affect future MGC operations, including operating at sites that were not damaged in the quake.

This shortage of BT would most impact programmable logic vendors Xilinx Inc. and Altera Corp., as well as Qualcomm Inc.  

Hitachi Chemical Co. Ltd. makes an alternative resin—MCL-E-679—that has been qualified by a few suppliers, but she said she has not been able to verify whether the production of that material was impacted by the quake. Several Hitachi manufacturing sites were damaged in the quake and remain idle. 

Matsumoto noted that MediaTek Inc. does not use BT in its packages, but that Spreadtrum Communications Co. Ltd. does. Matsumoto said Texas Instruments Inc. uses BT in its packages, but that since TI's Miho fab was damaged in the quake and won't return to full production until at least July, the BT issue should be resolved before it becomes a problem for TI.

Amkor Technology Inc. manufacturing facility in Kitakami, Japan, located about 260 miles northeast of Tokyo, has suffered relatively minor damage. The Kitakami facility is currently closed due to power supply interruptions and plans are underway to restore production capabilities at the site when power, gas and water supplies, and transportation systems are stabilized. 

The Kitakami facility is Amkor’s smallest operation in both units and revenue, generating approximately $10 million to $11 million of monthly sales prior to the earthquake. The Kitakami facility only provides services to a few Japan-based customers.  

Amkor is a major supplier of semiconductors, silicon wafers, specialty chemicals, substrates, equipment and other supplies to the electronics industry, and the industry is currently evaluating the potential effect of the earthquake on the overall supply chain for electronics. Since the earthquake, we have been in close communication with our customers, suppliers and OEMs to analyze the situation and evaluate alternative sources of supply where appropriate. Like many companies in the semiconductor industry supply chain, we operate with multiple suppliers from different geographic regions. This diversification is intended to help mitigate any potential disruptions from events such as these. However, it is too early to comment on the broader impact the earthquake may have on the electronics industry and our business and operations.'' 

Advanced Semiconductor Engineering Inc. (ASE) is also obtaining ''molding compound'' from Korea and China. This was after its suppliers in Japan were impacted by the quake.

Sources: Semiconductor packaging News.

HK Snob

Electronics Component Market after Japan Quake

In spite of the 9.0-magnitiute Japan earthquake and the ensuing devastating tsunami striking Japan on March 11, The Component supply chain has been serious disturbed in Japan. This include the NAND Rams that price has been surged up more than 7% since last Friday. Many of the components of the certain electronics devices are still made in Japan. There is a immediately need for Japan to re-construct and well plan their suppliers for souring the right component for their products, beside, the rise of Japanese Yen exchange would force to speed up their oversea production scale up plan. Counties like Philippines, Thailand, Malaysia and China will be the ones to be beneficiated by these move.

However on the other side, Japanese and most of the major Asian Cities would speed less on Electronics products, computer, iPad2, Note book in coming 2-3 quarters.

Some good news is Chairman Morris Chang of Taiwan Semiconductor Manufacturing Co. (TSMC) yesterday said his firm’s goal of achieving a 20% sales growth, denominated in the U.S. dollar, will remain unchanged.

Overall, people tends to spend less on luxury goods, electronics hand held product as such handphone, GPS systems, and RAM, LED, LED, IC CPU, Capacitors, RAMs and  Panel will be rising their price in the coming 6-9 months.

HK Snob

Japan after Quake

Japan has the world No. 1largest LED manufacturing Plant Nichia account for 18% of World LED production as the 2010 revenue data told us.

Japan accounts world’s 20% global Semiconductor Production.

Company Headquarters in Japan generated 63.3B in microchips revenues; representing 20.8% of the world wide market.

Japan Produced 10% of world’s DRAM in 2010.

Toshiba accounts 35% of global NAND flash products in terms of Revenues 2010.

Japan Headquarters companies are world No. 3 in Semiconductor production.

Japan is 14% of world total LCD TV panel Production.

More impact to Japan is that the component on the TV LCD Panel such as the Glass, Colour filter , polarizer , CCFL and LED are mostly made in Japan.

Sharp partly shut down their panel manufacturing for LCD TV... and Murata had shut down some of the component manufacturing which would affect the manufacturing at Foxconn for Ipad2!

There are a lot of electronics modules for Automobile is made in Japan and a lot are for export.

Many of the Automobile like Nissan, Toyota, Mazda and Honda has stopped some of their manufacturing due to shortage of Module supplied by their OEMs which were more or less damaged in the Tsunami.

Nissan Stopped Production and loss shipment of 23,000 cars, whereas Toyota for 40,000 cars, Honda for 16,600 cars a day, that is $14M loss a day just for Honda.

Japanese will not spend money on Luxury goods anymore, or at least less significantly comparing with last week and before.

For those Luxury Goods such as watches Rolex, Patek Philippe, IWC , Japan is one of the biggest market after Hong Kong. I think Japan is the world 2nd largest Export Country after Hong Kong.

Well, I find that these are Japan’s Market share on these big European luxury Brands.

Hermes 21%, Bvlgari 19%, Luis Vitton 8.8%, Coach 36%, Tiffany 19%, Gallaway 18%....

So we can see that these luxury good market will drop significantly for at least I year, they may switch to export more to other Countries like China and Hong Kong in Asia.

Gold may be the item that we can speculate that it can reach $1,700 an ounce soon.

This will trigger world threat in the stock market, especially the Libya situation is still tense and had no way to see when Col. Kaddafi would step down, Hong Kong Index Will drop in the coming weeks… down to 21,000 points…

More important point is more nuclear threat happens in Japan and Most of the people would flee to distant prefecture in Japan or to overseas countries such as Hong Kong, Singapore and Philippines.

I am thinking that it would be a great impact to Japan and  World’s Economy and it may take at least 12 months to recover… Provided there is no more serious Earth Quake happens anymore.

Further more, it triggers more safety measurement for plan of Nuclear Plant building,

It forces Japan Company to diversify their manufacturing facilities in overseas countries such as the Philippines, Thailand and Malaysia.

In Short the Stock In Tokyo, Singapore and Hong Kong will keep on falling. But this is only over-sensitiveness of the investors, in mid term starting August, the stock like iron ore, cement and steel in China will have tremendous momentum to gain as to support Japan on re-construction.

The foreign companies would not consider to put all egg in one bucket and to consider in future the headquarters not in Japan... may be better in Hong Kong or Singapore.

HK Snob

Semiconductor Capex Growth 20% in 2011

SEMI’s internal analysis of semiconductor manufacturers’ capital expenditure (capex) announcements used to update the fab. database predicts that total semiconductor capex will grow between 15 and 20% in 2011.  Attached Table compares investments on fab equipment and construction, and how those rates compare to the record high levels set in 2007.
We can see that there may be a drive for demand of End Of Line manufacturing equipment in 2011 that may happen in Q2.
We can see Discrete is rising from 4% to 7% in 2011 vs 2010
MPU and Logic rises from 16% to 23% in 2011  Vs 2010
Memory reduces from 36% from 645 in 2011.

Slow Down for LED Fabs
The largest segment for new fabs is the LED industry, with wafer sizes of 2-inch and 4-inch. Significantly fewer new LED fabs will begin construction in 2011 and 2012. SEMI’s World Fab. report lists 24 new LED fabs beginning construction in 2010, but only five new LED fab. projects are likely in 2011.  
This slowdown may be explained by recognition that in the near-term the industry has added too much capacity, coupled by changes to government subsidies in China.  For example, historically local governments in China supported the domestic LED industry with hefty subsidies.  Companies received up to 8-10M RMB for each MOCVD reactor. Some of these subsidies will expire this year, and others are expected to change.
On the other hand, LED per TV reduces dramatically with Disruptive Technology of LED. From Average 1000 LED in 2009 to 200 LED 2011. That was 5 times reduction rate.

We can see that IC will be experiencing a steady growth this year comparing with Last year with more significantly in Discrete Area. Were as LED will be slow down in the growth comparing with 2010.

PS
Data source  Source: SEMI World Fab Database Reports (February 25, 2011)

HK Snob