AUSTIN, Texas-Austin-based Freescale Semiconductor (Freescale) and Dallas-based Texas Instruments Inc. (TI) announced this week that the catastrophic earthquake in Japan has disrupted manufacturing operations for both companies, which have facilities in Japan.
Soon after the disaster, prices of semiconductors for mobile phones and computers rose sharply due to a shortage of supplies because of plant closures, as more than 20% of semiconductor production globally comes from Japan.
TI reported that one of the company’s three plants, located approximately 40 miles outside of Tokyo in Miho, absorbed substantial damage and it will adversely affect first- and second-quarter revenues as the return to full production is stalled until July. The Miho location was responsible for around 10% of production earnings in 2010.
The company said in a statement that initial repairs to the TI facility in Miho should take about three weeks to fix systems that deliver gas, water, air, and various chemicals and that the costs to repair and scaling back production will be addressed in a first-quarter earnings report April 18.
Another of the three facilities in Aizuwakamatsu, approximately 150 miles outside of Tokyo, was also hit by the quake but TI stated that the plant is ready for an initial return and should be in full production again by the middle of April. The third TI plant in Hiji, located 500 miles outside of Tokyo, was not affected by the quake.
Freescale operates a factory in Sendai, Japan, which is near some of the most damaged areas in the wake of the quake. The company said it’s too early to gauge the extent of damage and that power outages are making it difficult to assess how the damages will affect the hundreds of workers at the facility.
Freescale announced two years ago that the company was slowing production in Sendai and moving it to other areas. The quake may expedite the closing of the plant. Freescale’s administrative offices in Japan only incurred small damages.
Toshiba Corp., which supplies flash-memory chips to Apple Inc., also shut down plant operations in Japan until further assessments could be made.
