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25% Of Global Silicon Wafer Production Suspended

Major wafer suppliers Shin-Etsu and MEMC have stopped production in Japan to assess damages from the earthquake.

Two Japanese facilities that account for a quarter of the global production of silicon wafers used in making semiconductors have been shutdown temporarily, as officials assess the damage from the devastating March 11 earthquake, according to research firm IHS iSuppli.

Shin-Etsu Chemical Co. Ltd. has stopped manufacturing operations at its Shirakawa facility, and MEMC Electronic Materials Inc. has halted manufacturing at its Utsunomiya plant, the research firm reported Monday. These two facilities together produce 25% of the global supply of silicon wafers.

How long the facilities will remain closed is unknown. A long-term shutdown could seriously hurt global semiconductor production, IHS says. The Shun-Etsu facility produces 300-mm wafers used mainly in the manufacturing of memory devices, such as flash memory and DRAM. The plant accounts for 20% of the world's wafer production, while the MEMC plant accounts for another 5%.

Shin-Etsu has acknowledged the shutdown, and said that inspections of the facility have been hampered by the many aftershocks that have followed the 9.0 quake. The company has confirmed that the plant suffered some damage. "At present, it is still unclear how long it takes to restore such damaged facilities and equipments," the company said in a statement.

Shin-Etsu has shifted production of silicon wafers from the Shirakawa facility to other plants owned by the Shin-Etsu Handotai Group. How effective the shift to other plants will be in mitigating the loss of the Shirakawa operation is not clear.

MEMC has also acknowledged that operations at the Utsunomiya plant have been suspended pending building and equipment safety inspections. "As a result, MEMC expects that shipments from this facility will be delayed over the near term," the company said in a statement.

MEMC has a network of 12 manufacturing facilities around the world, with the Utsunomiya plant one of eight that make semiconductor wafers and one of three that slices and polishes 300-mm wafers.

IHS also reported Monday that Mitsubishi Gas Chemical Company Inc. and Hitachi Kasei Polymer Co. Ltd. have suspended production of what amounts to 70% of the supply of copper-clad laminate, the main raw material used in making printed circuit boards used in all electronic products, from PCs to smartphones to digital watches.

The stoppage is expected to last less than two weeks, which is not long enough to have a major impact on circuit board makers, IHS said.

AKM Semiconductor has reported that the production facility that makes the electronics compasses for Apple's iPad 2 has not been damaged. The company said that it doesn't expect any production problems for the compass, according to IHS.

Other companies reporting production problems in Japan include Renesas Electronic Corp. Renesas has halted manufacturing at Tsugaru facilities, which make analog and discrete devices; its Naka plant, which makes system-on-chip and microcontroller devices; and its Takasaki and Kofu fabs, which produce analog and discrete parts.

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