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    • Japan quake strains supply chain from chips to ships
    • Andy Mar 15

      Reuters) - Automakers, shipbuilders and technology companies worldwide scrambled for supplies after the disaster in Japan shut down factories there and disrupted the global manufacturing chain.

      Technology companies were particularly hit since Japan accounts for one-fifth of the world's semiconductor production, including about 40 percent of flash memory chips used in everything from smartphones, tablets to computers.

      Multinationals that buy parts from Japan or have plants located there were grappling with power blackouts, factory closures and transportation problems after roads, railways and ports in north east Japan were destroyed by Friday's devastating earthquake and tsunami.

      Toyota Corp was hard hit as many of its plants were near the epicenter of the 8.9 earthquake, and Sony Corp has suspended production.

      Texas Instruments warned its two suspended plants would take until July to return to full production, though it had managed to re-direct 60 percent of their output to other sites. Of the two, its Miho facility churns out about 10 percent of its analog chips by revenue.

      Intel Corp was managing better. It buys wafers from Japan but relies on flights to transport goods.

      "Right now the main issue is trying to sort through the issues associated with moving materials within Japan," Intel spokesman Chuck Mulloy told Reuters.

      ON Semiconductor said unreliable power supplies kept one its six factories off line.

      These disruptions pushed shares down worldwide in the industry. The Thomson Reuters G7 Semiconductor & Semiconductor Equipment Industry Group Domestic Float Price Return Index was off 1.1 percent late on Monday.

      Rolling power blackouts are set to hit Tokyo and surrounding areas over coming weeks, adding to the challenge of inspecting and repairing northern Japan manufacturing plants. Aftershocks and radiation leaks from damaged nuclear power plants also threaten production in the region.

      Companies and analysts said it was too early to gauge how long the problems would last. Power supply is critical, as is transport. Ports handling as much as 7 percent of Japan's industrial output sustained major damage from the quake, with most seen out of operation for months.

      AUTOMAKERS

      Toyota plans to halt production at all its 12 Japanese plants in Japan through Wednesday to support relief efforts, slashing output by 40,000 vehicles.

      "Not only is the struck region one of our production bases, those directly hit and vastly affected include our dealers, suppliers and numerous other partners," Toyota President Akio Toyoda said in a statement on Monday.

      Honda Motor Co said it would suspend production at its Japanese plants at least until March 20, and it was closely monitoring the supply of parts to its southern England plant in Swindon.
       
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