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Business | November 04, 2011

Thailand Flood impacts Semi Test & Assembly operations of multiple suppliers

Numerous semiconductor suppliers headquartered around the world maintain assembly and test operations in Thailand. Many of these facilities have been affected by the disaster.
Although the worst of the flooding has passed, the catastrophe has upset production at some of these facilities, which may require customers of these specific companies to adjust their supply strategies. However, the impact is not significant enough to have a measurable effect on overall semiconductor industry revenue growth.

Semiconductor suppliers whose test and assembly operations have been affected include ON Semiconductor, ROHM Semiconductor, Lapis Semiconductor, Hana Semiconductor, Stars Microelectronics, Vigilant Technology, STATS ChipPac and Toshiba.

Other companies operating test and assembly facilities in the nation have not yet suffered any direct impact from the disaster, including Microchip, Maxim Integrated Products, NXP, Spansion and UTAC. However, some of these companies have encountered indirect impacts due to disaster-related disruptions among their suppliers.

Outside of the semiconductor makers, at least one supplier of a key component used for semiconductor assembly has been impacted: Sumitomo Thailand, a maker of lead frames.

ON Semiconductor’s Thailand semiconductor assembly and test facility has been impacted by the flooding. The majority of the products shipped from this facility serve the Japanese market. ON is in the process of relocating its production to other sites.

ROHM’s sole facility in Thailand has been closed since Oct. 19. The facility conducts assembly and test for integrated circuits, discrete transistors, diodes, resistors and tantalum capacitors. ROHM is attempting to shift production to other locations.

Lapis’ operation, which is located in one of the most flooded areas—Rojana Industrial Park—now is closed. Lapis is looking to supply product from alternative locations.

The Thailand facility of Hana Semiconductor, a subcontractor for Microchip, Texas Instruments (TI) and others, is currently submerged. Until the water recedes, no assessment can be made as to the length of time that the facility will remain inoperative. TI and Microchip are relocating as much production as possible to other qualified locations.

The Ayutthaya facility of Stars Microelectronics has been flooded. A subcontractor for Microchip, Stars is relocating operations to other sites and anticipates that the impact on production of Microchip’s wireless modules will be minimal.

Vigilant Technology has shut down its Thailand facility, although it has suffered no flooding at this time. Vigilant is a supplier of mature low pin-count and power semiconductor packages.

STATS ChipPac has suspended operations at its Thailand location, which accounts for less than 10 percent of STATS revenue. The company is relocating assembly and test operations to other facilities and expects minimal impact on its customers.

Operations in Thailand have been stopped since Oct. 12 at Toshiba Semiconductor for assembly of LEDs and discrete chips. The operation is located at Bangkadi Industrial Park.

Sumitomo Thailand has stopped supplying lead frames from its Thailand facility to TI. However, Sumitomo has other operations and is shifting demand to other locations. The impact on Texas Instruments is currently expected to be minimal, and TI already has indicated that there will be no shortages in the fourth quarter. Lead frames serve as the supporting structure of semiconductors, playing a key role in the assembly process.

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