Update from Japan: Big aftershocks slow fab recoveries

Longtime semiconductor exec Takeshi Hattori continues his reporting on the aftermath of the massive Japanese earthquake and tsunami, with updates on the nuclear crisis, status of facilities and production struggles. See previous updates from Japan here, here, and here.

Click to EnlargeApril 11, 2011 - Just one month has passed since the March 11 "Great East Japan Earthquake." The death + missing toll from the earthquake and tsunami has reached 28,000 — in several towns in Miyagi Prefecture, all the municipal documents including residency files (and even municipal office buildings themselves) were swept way by the tsunami, so the exact number of missing people there are still unknown. The nuclear crisis is still ongoing with unstable GE/Toshiba/Hitachi-made reactors at the Fukushima Daiichi Nuclear plant in Fukushima Prefecture. Strong aftershocks among many other smaller ones halted again the operations of once-recovered manufacturing plants. Continuous aftershocks (one after another) make continuous fab operations as well as nuclear reactor cooling works more difficult. The supply chain disruption due to the halt of fab operations has been expanding to all over Japan and globally.

As bad as Chernobyl

The Japanese Government announced today (11:00am, Tuesday, April 12) that they have escalated the Fukushima Nuclear Plant Accident to be ranked at Level 7 on the International Nuclear Event Scale (INES), up from previously a level 5. This is the scale’s highest level, and equal to the 1986 Chernobyl nuclear disaster. Some international institutes, however, had already pointed out such a kind of alert. Japanese government (Ministry of Economy, Trade, and Industry) will be criticized for its delay of procedures internationally, as will Tokyo Electric Power Company, which has kept much important information about the nuclear plant crisis in the dark.

Aftershocks one after another

The strongest aftershock so far — M7, or measuring six upper (6+) in Sendai and three (3) in Tokyo on the Japanese intensity scale — struck Miyagi Prefecture and Tohoku District at 11:32pm on last Thursday April 7, causing large area blackouts to 4 million houses and plants in six prefectures in Tohoku Districts. The aftershock and the subsequent power outages halted already-recovered plant operations, as well as recovery work required checking structures and equipment for possible damage in every semiconductor/electronics facility in Tohoku District. This includes:

  • Fujitsu’s semiconductor wafer processing plant in Kitakami, Iwate Prefecture;
  • Seiko Epson’s wafer processing plant in Sakata, Yamagata Prefecture;
  • Elpida Memory’s Assembly plant in Akita Prefecture;
  • Renesas Electronics’ four semiconductor plants in Aomori and Yamagata Prefectures;
  • Alps Electric’s four electronic components plants in Miyagi Prefecture;
  • Rohm’s semiconductor plant in Miyagi prefecture;
  • Sony’s two optical parts plants in Miyagi prefecture;
  • Tokyo Electron’s three semiconductor equipment manufacturing plants in Iwate and Miyagi;
  • TDK’s electronic materials plant in Akita; and
  • Ulvac’s vacuum equipment plant in Aomori, among others.

Tohoku Electric Power Co. reported that external electric power sources at the Onagawa nuclear plant in Miyagi Prefecture and at the Higashidori nuclear plant in Aomori Prefecture were partially lost. The Nuclear and Industrial Safety Agency of the Ministry of Economy, Trade, and Industry (METI) said cooling functions were lost for up to 81 minutes for the spent fuel pools at the Higashidori and Onagawa power stations. (By the way, it is very questionable that the Safety Agency belongs to and is controlled by nuclear-energy promoting METI.) These plants have been out of operation since the March 11 quake and tsunami. Backup external power sources are being used for cooling the reactors and spent fuel pools. Some of the external sources were out of order and one diesel generator had fuel leakage. These facts clearly proved that nuclear plants’ countermeasures against power-station blackouts after earthquakes are very poor.

Another strong earthquake (M7.0, or six lower (6-) in Fukushima, and five lower in Tokyo on the Japanese scale) struck Fukushima prefecture at 5:16pm on Monday, April 11. The epicenter was near Fukushima Daiichi Nuclear Plant. Reactor cooling functions was lost for 50 minutes there, according to the METI’s agency. Large-area blackouts happened in Fukushima Prefecture. The damage to factories in the area is unknown presently. Smaller aftershocks are hitting East Japan every 10-20 minutes from 5:45-8pm (while I am typing this report). According to Japan Meteorological Agency, M7-class afterquakes are expected in the Tohoku District in the near future — though it is unclear whether that means a few days, or weeks, or even months.

Operation "Tomodachi"

Dubbed "Operation Tomodachi" ("friends" in Japanese), the US has deployed more than 16,000 military-related personnel (Army, Navy , and Air Force) since the March 11 earthquake and tsunami in East Japan, including the US Navy Seventh Fleet with aircraft carrier USS Ronald Reagan. Many of those troops have started moving back to normal duty posts in Japan or elsewhere. In their place, 155 Marines from the Marines’ Chemical Biological Incident Response Force (CBIRF), which is based at the Indian Head Naval Surface Warfare Center in Maryland, arrived at the US Air Base in Yokota, Tokyo in midnight on April 4. Trained in personnel decontamination and monitoring of radiation levels, the team would not be involved in the efforts to stabilize the reactors at the nuclear plant, but preparing for the worst case — probably reactor explosions or something like this, according to the sources.

Flame-less Japanese mass-media

Japan’s mainstream media such as major newspapers and commercial TVs have served as something like TEPCO’s spokesmen, because TEPCO and the Federation of Electric Power Companies are one of the biggest source of advertising revenue for all the major mass-media. TEPCO is reportedly to spend about US$120 million annually for advertisements on Japanese television, radio, and major newspapers. Even the repetitive public "apology" and "energy-saving" advertisements offered everyday by the company is bringing more money into the media. TEPCO refused to disclose the amount of the expenses; people expect TEPCO to donate it to refugees in Tohoku Districts.

Governmental estimation of loss

The Japanese Government estimates, based on hearing from major Japanese companies as of the end of March, that the possible halt in production of semiconductor and related materials in Japan from March 11 to the end of April will have some ¥40 trillion ($500B) impact on worldwide end-product manufacturing and services. The halt will continue beyond this month for several months, so the impact will become much more.

The halt of microcontrollers and its embedded SoCs in the Naka Plant of Renesas Electronics Corp., the world’s top supplier of microcontrollers (as a merge of Hitachi, Mitsubishi, and NEC’s logic LSI divisions), will result in a loss of around ¥6.5T ($80B) in the automobile industry worldwide during March 11-April 30, according to the government estimate. The production of ¥400B worth of flat-panel television sets will also be halted.

The halt of production of silicon crystal ingots and wafers in SHE’s Shirakawa Factory in Fukushima Prefecture, the world largest silicon wafer producing base, will result in a total loss of ¥1.5T ($18B) in world-wide semiconductor production during March 11-April 30. The impact of this halt to the consumer electronics, telecommunications, information and broadcasting and other industries could reach about ¥32T ($400B), the government estimates.

According to a quarterly report released by the Bank ob Japan today (April 11), seven of nine Districts in Japan downgraded their assessment of local economic conditions in April from three months ago, citing disruption to production caused by the March 11 earthquake.

Travel tips for Japan

Japan Rail’s Narita Express trains from Narita (New Tokyo) International Airport to Tokyo are available both in the morning and evening, but are not available between 11:15am and 5:15pm when most flights arrive from major cities in the US. Keisei Electric Railway serves reduced numbers of limited express to Ueno, Tokyo. Limousine buses are available as scheduled to major hotels in Tokyo. JR and private railway trains and subways in Tokyo as well as "shinkansen" bullet trains from Tokyo to Osaka/Hakata/Nagano/Niigata are available on time, but not available to Sendai and beyond in Tohoku District. Instead, bus service is available between Narita/Tokyo and Sendai. Once Sendai Airport was buried in mud brought by the tsunami; after cleaning up, relief flight services will be available between Sendai to/from Tokyo (Haneda) and Osaka (Itami) starting April 13 until the reopening of JR Tohoku Shinkansen which is expected at the end of April. Almost all offices, hotels, restaurants, and shops are open as usual in Tokyo, but many of them dim lights and close earlier in the evening to save electricity.

Update: Semiconductor plants

Sharp

Sharp Corp. in Osaka has reportedly (but not yet announced officially) suspended operations in its two major domestic LCD panel plants early April, citing an inability to secure a stable supply of industrial gas in the aftermath of the March 11 earthquake. The drastic drop of LCD panel demand after the March 11 earthquake and excess stocks might be another reason, according to industry observer sources.

The LCD panel plants in Kameyama, Mie Prefecture, and Sakai, Osaka Prefecture, are expected to resume operations after the Golden Week holidays that fall in the end of April to early May.

The shutdown is not likely to affect Sharp’s LCD TV output as it has a month’s worth of panel inventory. Production of smaller LCD panels for smart phones and video game consoles among other applications , will be continued at Sharp’s plants in Tenri. Nara Prefecture and other places.

Renesas

As reported previously, Renesas plans to restart partial operation this July at its Naka plant for automotive controllers. But the government has ordered all manufacturing factories in Kanto District — which includes the Naka Plant — to reduce electricity consumption this summer, as another rolling blackout is scheduled during the peak season of electricity consumption. So, it will be difficult to continue operations after July. The alternative microcontroller production is planed at GlobalFoundries in Singapore, as well as Renesas’ two plants in Saijyo on Shikoku Island, and in Kumamoto-Kawajiri on Kyushu Island.

Shin-Etsu Handotai

SHE has just started shipment from its Shirakawa Plant of silicon wafers already completed before the March 11 earthquake. The company has issued no revised announcement regarding the status of severely damaged plant. Further damage by today’s big aftershock is anticipated, but not known as of now. Big aftershocks have been hitting Fukushima Prefecture where SHE’s plant is located. Adding the problematic nuclear plant and sudden large area blackouts after the quake, continuous production will be difficult after operation recovery and even the recovery work must be slow.

The company cannot predict when the plant will become operational.

Toyota Motor

Toyota Motor Corp. in Toyoda-city in Aichi Prefecture announced that, due to parts supply difficulties, vehicle-production plants in North American will be halted on April 15, 18, 21, 22 and 25, and production at virtually all North American engine and parts plants is also to be halted on the same dates. Production of Toyota’s Camry model at a Fuji Heavy Industries Ltd. factory in Indiana will also be halted. No decisions have yet been made regarding production after April 25.

Toyota also announced that it will be able to start vehicle production inside Japan on April 18 (to be continued until April 27) with 50% of normal production capacity. Afterward, all domestic production facilities will observe so-called annual Golden holidays (series of national holidays + two weekends) through May 9. A decision on post-holiday production will be made later.

Freescale

Freescale announced on April 6 (JST) that its seriously damaged wafer processing facility in Sendai, Miyagi Prefecture, will not reopen. The ongoing safety concerns, damage to infrastructure and other basic services in the region, compounded by numerous major aftershocks, prohibit them from returning the facility to an operational level required for wafer fab production in a reasonable timeframe. Two years ago the company announced it would close the Sendai operations; prior to the earthquake and tsunami, the company planned to complete the closure of the facility in December 2011.

ON Semiconductor/SANYO Semiconductor

The firm announced on April 8 that infrastructure services such as fuel, electricity, gases, water, chemicals and logistics to ON Semiconductor’s and SANYO Semiconductor’s factories in Japan and those of its customers and suppliers in Japan are continuing to stabilize. While the potential for intermittent supply of these services to cause temporary production disruptions is diminishing, as a risk mitigation, the company is identifying options to shift production to other facilities to support supply continuity for customers.


Takeshi Hattori is president of Hattori Consulting International and editorial columnist of Electronic Journal in Japan, with more than 36 years experience in the semiconductor field. He is a Fellow of the Electrochemical Society, founding member of the International Symposium on Semiconductor Manufacturing, member of SEMI’s Japan regional standards committee and SEMI/SEAJ Forum, and The Confab advisory board, among many others.

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