Electronics Production | March 16, 2011
Effects on global DRAM capacity
What effects did the earthquake, the radiation leak at Fukushima No.1 and the subsequent power cuts in the northeast of Japan have on the silicon wafer supply and global DRAM capacity.
Since March 14th, Japan started to enforce electrical brownouts among areas with less damage, and made electrical usage concerning transportation and daily life the first priority. There is still no definite time on when electricity will be restored in Miyagi and Fukushima, where the earthquake caused serious damage. As for the DRAM supply chain, Shin-Etsu Handotai's Shirakawa plant in Fukushima and SUMCO’s Yonezawa plant in Yamagata, which are both located in northeast Japan, mainly manufacture silicon wafer. The earthquake caused serious damage to the Shirakawa plant. The core of Shin-Etsu’s silicon wafer capacity, depends on Fukushima nuclear power plant for its major electricity usage. However, the earthquake did not cause as much damage to SUMCO, since SUMCO’s core of silicon wafer capacity is in Kyushu. The silicon wafer manufacturing process requires long and stable electricity supply; no power cuts are allowed. Furthermore, electrical brownouts in northeast Japan could last for several months. Considering the fact that transportation facilities are damaged and Shin-Etsu Handotai and SUMCO own over 50% market share, it is believed that the DRAM material supply chain will be impacted. As for Japanese manufacturer Elpida, the earthquake was merely magnitude 2 at its location. Except for its need to relocate immersion scanners, which Elpida still had in stock, the earthquake’s effects on Elpida were limited. The major supply of Samsung’s silicon wafer demand are from SUMCO’s Kyushu plant and Samsung itself, so Samsung was not affected much by the earthquake, either. Hynix’s main supply of silicon wafer is from Shin-Etsu, so it is currently looking for other suppliers. As for Taiwanese manufacturers; Powerchip and Rexchip still have some stocks left, and will keep track of the supply chain of Shin-Etsu. Nanya Technology and Inotera Memories’s main silicon wafer supply is from Formosa Sumco Technology, so there is no effect on its production. Winbond has many different suppliers, so no supply shortage is expected. Toshiba states that besides Shin-Etsu, they still have other suppliers, and the wafer usage for NANA Flash plants will be made the first priority. Hence, temporarily, no effect on production is expected. Hynix’s main supply of silicon wafer is from Shin-Etsu and SUMCO, so the production will not be affected. Samsung states Shin-Etsu is not their major supplier, so they will not be affected, either.