Chip makers start to resume work in Japan

High-tech companies in Japan are slowly starting to get some of their manufacturing plants up and running after a massive 9.0-magnitude earthquake and subsequent tsunami hammered the country nearly two weeks ago.

Japan has been devastated by the series of disasters that hit the country starting on March 11. As the nation deals with massive loss of life, a nuclear crisis, damaged roads, buildings and communities washed away, as well as rolling electrical brown-outs and black-outs, its manufacturing and economy have also taken a major hit .

But, while companies in Japan still have to deal with damaged facilities, an overwhelmed workforce and a dramatic electrical shortage, there are positive signs that some computer chip companies are starting to right themselves.

"This is huge," said Rob Enderle, an analyst with the Enderle Group. "The technology ecosystem is very complex and concerns started shifting from primary to secondary and tertiary venders very quickly when it was clear how bad the problem was."

"Much of the world's production, of everything from tech products to cars, has been impacted because almost every modern product has some tech in it and almost all tech has at least one part made in Japan," Enderle said.

He added that he thinks that, barring any more disasters, high-tech production there will be at about 80% in about a month and most problems should be fully resolved by the end of the year.

The crisis in Japan already has had an impact on the high-tech industry. Earlier this week, the research firm IHS iSuppli reported that the disaster was causing a shortage of 25% of worldwide production of silicon wafers , used to make computer chips.

"Because of this, the suspension of operations at these plants could have wide-ranging implications beyond the Japanese electronics industry," iSuppli noted in its report.

But work is beginning again.

The Japan-based hardware company Fujitsu, for example, has stopped production at three semiconductor manufacturing plants, but it has partially resumed operation at four other damaged facilities, including a PC manufacturing plant, a semiconductor fab and a semiconductor testing facility.

The company also has two facilities, including a mobile phone manufacturing plant, in full operation.

And while Toshiba, which is headquartered in Tokyo, is moving some production, including semiconductor manufacturing, to alternative facilities, the company has two semiconductor facilities up and running. However, both received "minor damage" during the disaster.

The semiconductor, electronic device and PC manufacturer reported that Toshiba Mobile Display, a wholly-owned subsidiary and maker of mid- and small-sized LCD displays, expects to take about a month before it get its manufacturing line in Fukaya up and running.

While the company is focused on becoming fully operational again, executives are concerned about getting the supplies they need to build their products.

"Every effort is being made to secure materials and parts and to minimize impacts on production," the company said. "Toshiba is investigating available stock, including channel inventory, parts and half-finished goods; negotiating with suppliers to switch production to locations outside the affected region; and promoting adoption of substitutes."

Renesas Electronics, which builds computer chips used in automobiles and consumer devices, partially resumed operations at five of its chip plants, and several more are expected to go back online, at least in a limited capacity, once the blackouts are over.

However, the company's Naka factory has been temporarily shut down and engineers are assessing the status of the facility's clean room for its 300mm wafer fabrication line.

Panasonic and NEC both reported Wednesday that they restarted production at some factories that had been halted after the earthquake.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com .

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