EnergyTrend: Japan Earthquake Affects the Global Supply Chain

published: 2011-03-14 10:33 | editor: | category: Analysis

EnergyTrend, a research subsidiary of TrendForce focusing on green energy industry, indicated that most solar cell manufacturers such as Sharp, Sanyo, and Kyocera are gathered in kanzai area of Japan. Therefore, the impact of quack was contained to minimal. According to Sino American Silicon Products Inc., production lines of its customers were unaffected. As for poly silicon, Tokuyama and M.Setek are the two Japanese companies producing the product. However, their global market share is not significantly large enough and the impact is still under investigation. Because M.Setek (partly owned by AUO) is close to the afflicted region which is near Sendai and Souma, staffs of the company were evacuated from plants and facilities were shut down due to electricity black out.

EnergyTrend believes that the impact on solar cells and modules is very limited and the domestic demand might increase. Supply of 12” wafer might be affected and the subsequent influence on 8” and 6” is still under observation. Though poly silicon production from the aforementioned two companies is just a small portion of global supply, the continued increase of price of poly silicon might be accelerated due to sentimental reasons.

Sony at the same time also evacuated staffs from its plants in north-eastern Japan. Because of electricity black out, production of Blu-ray discs, magnetic heads and batteries will be impacted. Though the impact on supply is temporarily insignificant, Korean and Taiwanese battery makers might see increased orders. From the viewpoint of the battery industry as a whole, EnergyTrend believes that Korean and Taiwanese battery protection IC manufacturers might be benefited, because Seiko’s plant shutdown will be the most influential issue on the overall supply. Mitsubishi’s plastic materials account for a small portion of the market share, its absence can be taken care of by other manufacturers. Battery cell sector still remains oversupply condition, the impact of Sony’s plant shut down will depend on its recovery schedule to be released later.

For the battery industry, the impact is widespread from upstream to downstream. As for upstream material suppliers, Mitsubishi Chemical and Seiko are both on the watch list. Mitsubishi Chemical’s anode powder mainly focus on NB applications for Japanese market. Seiko’s battery protection IC is used by many NB brands, especially Apple’s new Ipad 2. Close observation is crucial in the aftermath of affected material supply. Sony’s battery cell factory, supplying NB applications and power tools, was affected too. For the NB applications, the shutdown of battery supply is estimated to be 2 weeks with impact on 8 million units. However, because theoretically its battery pack needs to be assembled in China, there is still a chance that existing inventory may be sufficient. In other words, if Sony can restart production lines in 2 weeks with successful shipment, the impact can be minimal.

Based on EnrgyTrend’s observation, it is still hard for Taiwanese battery cell and pack manufacturers to be benefited directly from the disaster. Though supply of protection components will definitely be affected, the main suppliers are not based in Taiwan. Only the ones that have readily sufficient inventory will have a chance to gain contract for 2011 Q2. Simplo, Dynapack, and Celxpert are on the watch list. In terms of Japanese battery supply chain,  again, the recovery of infrastructure will be key to the recovery of the battery supllies.

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