Japan's IT industry chain "displacement"

After the devastating March 11 earthquake, high-tech companies in Japan were called "the hardest-hit areas."

Up to now, major Japanese IT companies including Sony, Toshiba, and Nikon have all been confirmed to be affected by the earthquake. Their major factories are currently shut down or out of service, and the specific losses are being assessed.

The reporter learned from the interview that the northeastern region, where the disaster has been severely affected, is also a major production base for semiconductors and wafers for semiconductors in Japan and the world. Once wafer supply is insufficient, downstream semiconductor shipments will have an important impact.

High technology is an important pillar industry in Japan. Despite Japan’s transfer of many technology product manufacturing bases in the tide of industrial transfer at the end of the last century, Japanese companies still mastered core technologies in the areas of high-tech raw materials, electronic components, and semiconductors, panels, and sensors. The main high-end core product manufacturing is also retained in Japan. Japanese companies influence the supply of global electronic products through the control of core technologies and raw materials.

Japanese IT giant "wounded"

Nikon, Fuji, Sony, Panasonic, NEC, Tokin, and other factories in Miyagi Prefecture all suffered Miyagi Prefecture, which suffered the most severe losses, and gathered a large number of IT product manufacturers. According to the official website of Miyagi Prefecture in Japan, Nikon, Fujitsu, Sony, Panasonic, NEC, Tokin and other companies all have factories in the area. The main products are digital camera, compact disc, car battery and other key parts and components products. These companies have suffered varying degrees of damage at local factories.

Some Japanese high-tech companies have reported the damage on March 13th. Among them, Sony closed six factories, one is a semiconductor factory in Miyagi Prefecture, the other factory mainly produces Blu-ray discs, magnetic heads and batteries. Panasonic’s joint venture ceased production and it produced batteries for hybrid vehicles. Matsushita has also closed four factories in Fukushima, Sendai and other places. These factories are mainly used to produce Panasonic "LUMIX" series of digital cameras. The Utsunomiya Office, where Canon’s SLR camera lens was produced, is currently closed.

Another hard-hit area is a semiconductor raw material supplier. The Northeast region, where the disaster has been severely affected, is Japan's and the world’s production center for semiconductor raw materials and wafers. Tantalum wafers are a highly sophisticated raw material used mainly for the production of semiconductors, which are only produced by a few manufacturers worldwide. The Shirakawa Plant, Japan's largest Shin-to-wafer company, is an important plant of Shin-Etsu Chemical Co., Ltd., which is located in Fukushima Prefecture, where nuclear power plants have problems. The plant provides 22% wafer production worldwide and is currently shut down.

In addition, due to the high precision required for semiconductors, panels, etc., earthquakes may cause shifts in the machine platforms and affect the quality of products. Japan is also an important exporter of chips and panel products. Therefore, earthquakes bring these two industries together. The influence was also concerned by the outside world.

The reporter learned from the interview that the chip and panel industries have been relatively less affected. Elpida, the world's largest DRAM chip manufacturer, said that the company's Hiroshima factory's location on March 11 has a magnitude of 1 and therefore has little impact. Toshiba, a major manufacturer of flash memory chips, also stated that its main plant is located in Yokkaichi, Mie Prefecture, Japan, with a shock level of 2. The plant was once shut down, but the plant facilities were not destroyed and production has now resumed.

On March 13, the relevant person in charge of the Japanese panel maker Sharp Corporation was interviewed by the reporter. As Sharp's panel production line is mainly located in western Japan, it is far from the epicenter and the Sharp factory has sufficient measures to prevent earthquakes. Almost unaffected. Panasonic, another panel maker, is similar.

Taiwan and South Korea's refusal to accept the new and single aspect is due to the limited inventory of raw materials. On the other hand, it is also waiting for changes in market prices. For Japanese technology companies, the loss caused by the earthquake is inevitable. The outside world is more concerned with whether the negative effects of losses will be quickly transmitted to the production and supply of downstream electronic products.

According to news from the panel industry in Taiwan, due to the large number of suppliers of materials and components in the upper reaches of the panel industry, whether or not it will cause supply impacts is still being confirmed. However, even if the upstream suppliers of materials supplied by Japan are affected by the earthquake, there will be inventory available for short periods of time. In addition, Taiwanese manufacturers can provide support, so emergency response measures have not yet been initiated.

According to Gu Wenjun, a senior industry analyst at iSuppli, the Japanese technology industry is a closed system. Although the scale of production is large, the main product market is still in Japan, so the impact on the global supply of electronic products is limited. For example, in the semiconductor field, regardless of Toshiba, Sony or Renesas, the main source of profits is in Japan, accounting for at least 50% of its total revenue. In 2010, the sales revenue of Japanese chip companies was about 63.8 billion U.S. dollars, accounting for about one-fifth of the global chip market sales revenue.

"The main impact may lie in the flash memory production of Toshiba." Gu Wenjun said that Toshiba provides 45% of the world's NAND flash memory chips, which is a major provider including Apple iPad2 and other products. Delayed delivery of chips due to earthquakes may cause production plans for products such as tablets and smartphones. It is expected that the price of flash memory will fluctuate in the short term, but from the perspective of long-term supply, the impact will not be too great.

In an interview with David Lee, head of the Shanghai Institute of Industrial Development in Taiwan, David Lee stated that given that Japan and China’s Taiwan are regions where earthquakes occur frequently, some international clients often have earthquake prevention plans and will accept Japanese manufacturers in the short term. Orders were transferred to areas such as Taiwan and South Korea, so the earthquake will not affect the long-term industrial competition. On the supply of some key components, usually the consumer electronics manufacturers will give upstream suppliers a one-to-a-month pre-production cycle, and suppliers will also stock up at least one week, so they are usually not affected too much.

The reporter also learned from Taiwan’s related tech industry that at present, due to the fact that Japan’s earthquake damage is still not clear, many companies in South Korea and China’s Taiwan region have now announced their rejection of new big orders, partly because of limited raw material inventory. On the other hand, it is also waiting for market price changes.