Analyst warns of DRAM and flash shortage after Japan earthquake

The DRAM and flash memory manufacturing sector could be hit hard after industry watcher IHS iSuppli warned that a quarter of the global production of silicon wafers used to make semiconductors has now been suspended as a result of the Japanese earthquake.

Operations have stopped in the Shin-Etsu Chemical Company's Shirakawa facility, where it makes 300mm wafers most commonly used in flash and DRAM memory, while MEMC Electronic Materials said its Utsonomiya plant had stopped manufacturing.

Together, the two facilities account for 25 per cent of the global supply of silicon wafer used to make semiconductors, according to iSuppli, which warned that worldwide semiconductor production could be seriously hit as a result.

It is uncertain when production will restart at the affected plants. Shin-Etsu claimed to be setting up operations at other facilities soon, and MEMC warned of delays to shipments in the near term, according to the analyst firm.

Elsewhere, the earthquake has damaged about 40 per cent of the total wafer capacity of Renesas Electronics, which could affect its output of system-on-chip and microcontroller devices, and Elpida Memory said that its semiconductor assembly facility in Yamagata has been damaged.

The iSuppli update appears somewhat more pessimistic than earlier accounts of semiconductor manufacturing in the country as more details emerge of just how much damage the 9.0 magnitude quake has caused.

IHS iSuppli reported last month that there were very high semiconductor inventory levels and it was thought that these would act as a cushion while manufacturing returns to normal in Japan.