Taiwan expects multiple impacts on tech from Japan quake

Production costs will go up, says Taiwan's Ministry of Economic Affairs

Taiwan's economic ministry expects semiconductor and display panel industries on the island to take a hit from the earthquake in Japan last week as supplies are suspended due to factory damage or transportation snarls, translating in some cases to higher manufacturing costs.

Local display-panel giants AU Optronics and Chimei-Innolux will see "a rather large impact" if Hitachi Chemical slows production of anisotropic conductive film, an epoxy that binds chips to glass or circuit boards, the ministry's Industrial Development Bureau said in a report late on Wednesday. Hitachi provides about 50 percent of the world's supplies of the film.

Semiconductor makers in Taiwan face a "fight to get raw materials" as 50 percent of the world's silicon wafer stock comes from two Japanese firms, Shin-Etsu and Sumco Corp., both affected by Friday's magnitude 9.0 quake, the bureau's report said.

The report echoed concerns expressed by economists and by the companies themselves.

The unusually strong quake off Japan's east coast north of Tokyo has led to rolling blackouts and slowed domestic transportation. Thousands of people have been confirmed dead.

"In terms of the ripple effect on the majority of our country's industries, it should come from flat screens, semiconductors and solar panels as they use of a lot of upstream materials and key components," the report said. "But the degree of impact needs to be monitored for each company's raw material stocks and whether they have a replacement source."

The ministry did not give a timeline for possible quake impacts or estimate how much they would end up costing local tech firms in Taiwan, which builds components and contracts to make PCs for the world's top brands.

Effects on supplies are hard to gauge partly because Taiwanese firms have found it hard to get information from Epson, Toshiba Semiconductor and others in the disaster area, the report said. But downstream chip makers will see costs rise if wafer stock dries up, the report said.

On Wednesday, a lead tech researcher with Bank of America Merrill Lynch said the supply chain would take as long as six months to return to normal. Some analysts expect any raw material shortages from Japan to delay shipments of PCs and consumer electronics and raise their retail prices.

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Tags consumer electronicsChimei-InnoluxShin-Etsuhardware systemstoshibaComponentshitachiAU OptronicsSumco Corpseiko epson

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Ralph Jennings

IDG News Service
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