Japan’s parts makers halt production after earthquake, another blow to supply chain

Even as Japan’s dominance of consumer electronics has faded, manufacturers have carved out a world-leading niche in highly specialized components such as Murata’s ceramic capacitors and Sony’s image sensors.


It emerged as a supply chokepoint after a fire broke out at the Renesas Naka plant last year

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It emerged as a supply chokepoint after a fire broke out at the Renesas Naka plant last year

Japan’s Renesas Electronics Corp, Murata Manufacturing Co Ltd, Sony Group Corp and other precision parts makers halted some operations on Thursday after the earthquake struck the country’s northeast, the latest blow to global supply chains. Even as Japan’s dominance of consumer electronics has faded, manufacturers have carved out a world-leading niche in highly specialized components such as Murata’s ceramic capacitors and Sony’s image sensors. Thursday’s production halt comes after component shortages related to the pandemic, which have already hit auto and electronics production globally.

“Stopping earthquake production is a net negative component that is currently selling out as fast as you can make them,” said Hideki Yasuda, an analyst at the Ace Research Institute. A 7.4-magnitude earthquake struck just before midnight Wednesday in east of Fukushima prefecture, the same region where Japan’s biggest earthquake struck 11 years ago.

Renesas emerged as a supply chokepoint after a fire at the Naka plant in Ibaraki prefecture last year. The firm that makes about a third of the microcontroller chips used in cars worldwide said on Thursday it had temporarily halted production at two plants and partially halted production at a third. Among them was the upgraded 300 mm Wafer Naka Plant. Ford Motor said 80% of its lost vehicle production in the second quarter of last year was due to fires.

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Sony said it has halted production at two factories in Miyagi Prefecture and a third factory in Yamagata Prefecture that manufactures storage media, laser diodes and image sensors.

Kyoto-based Murata, a top global supplier of ceramic capacitors that are used in smartphones, computers and cars, said operations at four factories were suspended after the quake. Later, a fire broke out at a unit manufacturing chip inductors which was later extinguished, it said. Highlighting the strain on the auto industry, Japan’s largest automaker, Toyota Motor Corp, said its global production target would be 10% lower in May and 5% lower than earlier estimates in June. The revised estimates do not include the impact of the earthquake.

While many companies are not household names in the West, such manufacturers are increasingly viewed as major national assets amid increasing technological competition between China and the United States.

Sony, one of Japan’s best-known conglomerates, said it has halted production at two factories in Miyagi Prefecture and a third factory in Yamagata Prefecture that manufactures storage media, laser diodes and image sensors.

The firm later said that production would be resumed gradually.

Chipmaker Kioxia said some production equipment at a factory in Iwate prefecture automatically shut down after aftershocks were detected due to the quake.

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