Japan’s Quake Forces Manufacturers To Close LCD Plants

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By Monika Bhatti
After last week’s earthquake in Japan, Toshiba, Hitachi, Sony and Panasonic are each reporting damages that have forced them to shut down LCD production facilities. PC maker Lenovo Group has also voiced worries over the impact that the disaster could have on its supply of parts.
Friday, March 18, 2011:  The 9.0-magnitude earthquake which ravaged Japan last week and sparked a tsunami on Friday has forced manufacturers in the country to halt production at their LCD (liquid-crystal display) facilities affected by the worst natural disaster to hit Japan in nearly 100 years. If research reports are anything to go by, the global supply of lithium-ion batteries, chip wafers and LCD panels may be affected, potentially putting a dent in corporate profits and economic growth more broadly. In order to deal with damages, Hitachi and Toshiba said they would halt some assembly lines for around a month. Panasonic, which controls Sanyo Electric, said it was suspending operations at some of its plants located north of Tokyo, but it wasn’t sure when restart these plants. “There has been some damage, though not a fire or a collapse,” at Panasonic’s LCD factory in Mobara, Chiba prefecture, said Akira Katoda, a company spokesman.

Sony, Japan’s biggest exporter of consumer electronics, has reportedly halted operations at eight factories, including those making lithium-ion batteries because of power outages and damages. While Canon suspended operations at eight production and development facilities in northern Japan, Nikon also halted four plants in Miyagi and Tochigi prefectures.

Bloomberg mentioned in a report, “Plant closures by Japanese manufacturers including Sony and Hitachi Chemical will likely affect the rechargeable-battery market, Daiwa Securities Group said. Prices of LCD panels and memory chips may rise as the earthquake leads to potential shortages, IHS ISuppli said yesterday.”

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Chinese personal computer maker Lenovo also expressed concerns over the impact that the Japanese earthquake could have on its supply of parts in the next quarter. “Delivery of products and the Japanese PC market would be affected by the earthquake, though the firm was still conducting checks on the extent of the overall impact,” Yang Yuanqing, chief executive, Lenovo Group told reporters on the sidelines of a conference on Thursday.

Japan churns out about 40 per cent of the world’s electronics and audiovisual components and 60 per cent of the silicon used to make semiconductors. But the nation’s strongest earthquake has resulted in shutting down of hundreds of plants in Japan. Researchers believe that damaged factories could take three months to resume operations, and others may be hampered by shortages of power and water.

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