Sony, Post-Quake, Begins Bringing Some Plants Back Online

Sony, whose facilities in northeastern Japan were among the hardest hit of any company’s in the March 11 quake and tsunami, has begun resuming operations at some of the plants damaged in the disaster, the company said Tuesday in an 8-K report filed at the SEC. But operations will continue to be curtailed or suspended for inspections or rolling power outages at other plants, including those that weren’t damaged, it said. The company didn’t estimate the financial hit it will take, saying it’s still evaluating the effects on its consolidated results.

Sony Manufacturing Systems’ plant in Kuki, in Saitama prefecture, which makes surface mounting equipment for semiconductor production, restarted March 15, Sony said. The same day, Sony Chemical & Information Device’s Kanuma plant in Tochigi prefecture, which makes bonding materials for semiconductors, also partially resumed production, it said. Sony Energy Devices’ Tochigi plant in Tochigi prefecture, which makes lithium-ion batteries, restarted only on Tuesday, Sony said.

Operations remain suspended at six factories in the hardest-hit areas of Miyagi, Fukushima and Ibaraki prefectures, Sony said. But the company said it “has begun inspection, restoration and repair of affected buildings and manufacturing equipment.” They include Sony Chemical & Information Devices plants in Tagajyo, which makes Blu-ray discs, and Tome, which makes IC cards, Sony said. Damage assessment also continues at closed plants operated by Sony Shiroishi Semiconductor in Miyagi prefecture, which makes semiconductor lasers, and at Sony Energy Devices lithium-ion battery plants in Koriyama and Motomiya, both in Fukushima prefecture, Sony said. DVD replicator Sony DADC Japan in Ibaraki also remains shut while the damage there is studied, Sony said.

Meanwhile, DisplaySearch, which first thought that the effects on flat-panel workflow from the quake and tsunami would be minimal (CED March 14 p1), now thinks that “in the near term, some panel makers need to work with new material suppliers to keep their lines running,” it said in a blog post Tuesday. “Longer term, there are some indications that key equipment production may be delayed."

For example, nitrogen trifluoride (NF3) gas is used in cleaning chemical vapor deposition chambers in the production of LCD panels, semiconductors and amorphous silicon thin film solar cells, DisplaySearch said. “The supply of NF3 was tight before the earthquake, as low prices had discouraged gas makers from expanding capacity. At the same time, growth in the display market as well as amorphous silicon-based thin film solar cell production had increased demand.” Two Japanese companies, Kanto Denka Kogyo and Mitsui Chemicals, account for about 30 percent of the world’s NF3 supply, it said. “Kanto Denka Kogyo has a plant in Shibukawa, in northeast Japan, which has been impacted by the earthquake and unstable electricity, potentially causing disruptions to NF3 production,” it said. “Reports from some panel makers indicate that the supply of NF3 is tight due to the earthquake and the unstable electric power supply in Japan."

Most panel makers “are holding at least a few weeks of inventory, giving them some time to locate alternative sources” for NF3 and other raw materials and components, DisplaySearch said. “However, one area that does not allow stockpiling is manufacturing equipment, needed to expand existing capacity or build new fabs.” Nikon’s damaged factory in Miyagi dominates the market for “stepper” equipment used in Gen 4 and smaller fabs, it said. The plant is closed, “with no indication of when it will resume operations,” DisplaySearch said. “Nikon was at full production capacity before the disaster and had a great deal of work in process,” indicating likely shortages if the plant doesn’t come back online soon, it said. “Gen 5 and larger fabs use projection lens scanning exposure equipment, which may also experience some delays as there are numerous sub-assemblies that must be produced and put together to make the complete machine.”