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Japan’s 2011 earthquake will impact component supplies to automation industry

The 11 March 2011 Sendai earthquake and tsunamis have dealt a devastating blow to Japan with the full extent of the damage still to be revealed.

The earthquake has also forced hundreds of factories to shut down across Japan, particularly in the affected areas. The threat of nuclear contamination has worsened the situation.

Several automation and process control products depend on high quality electronic components. The delicate nature of electronics production means it is particularly susceptible to tremors and process interruptions.

Automation and robotics are two industries that are likely to be the most affected as these are areas where Japan has a major presence.

Process control manufacturers in other parts of the world are less dependent on Japanese components having shifted their volume sourcing to Taiwan and China over the past two decades. A recent IHS iSuppli report found Japan supplied around a fifth of the global semiconductor market in 2010.

But Japan delivers 40 per cent of the world’s supply of NAND and this will impact the production of instruments and measuring devices. Global supplies of DRAM will be affected as Japan is a significant supplier. However, Micron and Elpida’s DRAM fabrication facilities are not believed to have been directly affected by the devastation.

Fujitsu is one of the companies that has been badly affected. Damage to buildings and production equipment including the ceilings, walls, and drain pipes of the Group’s plants and offices have affected business operations. Furthermore, planned rotational electricity blackouts have affected operations of companies based in the Kanto region of Japan.

Supplies of displays, monitors and LCD panels may be slightly impacted. Japan accounts for around six percent of the world’s production of large-sized LCD screens. Korean companies are expected to make up the shortfall.

Sony has closed six of its manufacturing facilities while Panasonic’s EV Energy plant in Sendai was reportedly destroyed by the tsunami, with a number of employees injured.

Almost all electronics manufacturers in the country have shut down production to prevent further damage, or because of power outages.

Besides direct damage to manufacturing sites, the Sendai earthquake and tsunami have destroyed infrastructure like roads, trains and ports, and these are expected to have an impact on supplies to and from factories which are still capable of running.

[Image courtesy USGS.]

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