Japanese crisis hits silicon wafer supply

A quarter of the global production of silicon wafers used to make semiconductors has been hit by the distaster in Japan, according to a research report from IHS released on Monday.

The earthquake caused the suspension of manufacturing operations at Shin-Etsu Chemical Co. Ltd.’s factory in Shirakawa and MEMC Electronic Materials Inc.'s Utsunomiya plant which has brought production of 25 per cent of the global supply of silicon wafers to a halt, the report states.

The Shirakawa facility produces 300mm wafers, which are used in advanced semiconductors that have high transistor counts. The wafers made in Shirakawa are mainly used in the manufacturing of flash memory and DRAM

"Because of this, the suspension of operations at these plants could have wide-ranging implications beyond the Japanese electronics industry," IHS said. "A 25 percent reduction in supply could have a major effect on worldwide semiconductor production."

Shin-Etsu’s Shirakawa plant makes around 20 percent of global silicon semiconductor wafers. The firm said that some of its production operations would be moved to other facilities, but it is not yet known how long it will take to bring the plant back online.

MEMC evacuated employees and suspended operations at its Utsunomiya plant after the earthquake. Its Utsunomiya facility accounts for a further five percent of worldwide semiconductor wafer supply.

It is also reported that two Japanese companies have stopped production of around to 70 per cent of the worldwide supply of the main raw material used to make printed circuit boards (PCBs).

IHS estimates that worldwide PCB production has about two weeks before shortages begin to hit.

Among the chip makers likely to suffers a shortage of silicon wafers if the supply remains shaky are Intel, as well as the foundries supplying the likes of AMD and Nvidia.