Monday, March 28, 2011

Ancillary Regional supply chain disruptions continue

As an adjunct to our March 23rd post here is a story on Daikin, one of two suppliers of the fluorinated ethylene propylene (FEP) used in plenum-rated cable.  In essence this company is only one of two suppliers of this material and they have basically lost half their capacity.  They have halted production, placed all existing orders on hold, and will not be updating delivery estimates until at least April 1st but most likely much longer (see,

Also in the article there is a very interesting link to their supplier letter:  They could operate but are unable to get the water they need to do so and are unsure when they will...

This is definitely going to be the true challenge ongoing as the anectdotal information has suggested, for many of the manufacturing plants in the region for a variety of electronics related products, from coatings, chemicals, finished goods, ICs, and much more...

We suggest opening the door as much as possible in your organizations, to accepting crosses and substitutes, at least short term to mitigate against these delays which could be ongoing for days, weeks, months, and maybe even years.

Saturday, March 26, 2011

Visceral view of the true impact on the infrastructure of the region

As we mentioned in our previous post the anectdotal evidence around the lasting impact to the coastline infrastructure is becoming more clear.

Please see the attached to experience the scope of the problems facing the region  The reality is that it will be at least 1-2 years to rebuild, thus the Japanese goverment's projection that this is a minimum 309 billion cost.

As you can see from the pictures of the power plant, the damage is extensive and there are reports of radiactive particles leaking into the water table.  The analysis will obviously be ongoing.  I will endeavor to keep you all closely posted on develpments and the impact on the supply chain.

Wednesday, March 23, 2011

Infrastructure challenges pose the biggest threat to supply chain disruptions in Japan

Anecdotal evidence has been suggesting since the March 11th earthquake struck North-eastern Japan, that there would be long-felt economic and political consequences.  Our review of the various manufacturer statuses in our previous blog hinted, both overtly and subtextually, that this was a going to be the bigger challenge.

Gas shortages, rolling power black-outs, destroyed roads and rail, water outages and more are all contributing into what it appears will be a disaster-recovery cost that is much larger then anyone expected.  Many are prognosticating that the total cost will exceed Hurricane Katrina, Andrew, and the US gulf-coast oil-spill disaster combined.

The international community will obviously feel the repercussions for many weeks, months, and in some cases, even years to come.  The question is this:  what are you and your procurement team doing to mitigate what is developing into a protracted challenge to supply chain cost and delivery structures? provides a fairly clear initial financial context to judge the problem facing the region.

Part of the answer is what we like to call regional arbritrage.  PCX, Inc. over the last 17 years has cultivated many exclusive contractual relationships in regions around the world to procure product otherwise not available.  The sources include excess or overstock material from OEM, CEM, ODM and authorized distributor channels.

See our part search and try us out to see how good we are.

Tuesday, March 22, 2011

Our deepest heartfelt condolences go out to the people of Japan following the tragic earthquake that struck northern Japan on 11th March 2011. The earthquake measured 8.9-magnitude (upgraded by some to a 9.0) on the Richter scale was determined to be the third largest earthquake in recorded history.  The death toll now stands at over 9,000 people with over 14,000 more missing and unaccounted for.  The tragedy also has caused near terminal damage to one nuclear power plant leading to severe power outages throughout northeastern Japan.

According to the ECIA aka Electronic Components Industry Association ( over two dozen board level component manufacturers and counting have suffered minor to severe damage and ongoing bouts of power, water, and gas outages.  The Denver post has an excellent ongoing general narative of the situation as it develops ( 

Component Manufacturers are performing ongoing assessments of their capabilities going forward in light of the existing challenges.  The following is by no means exhaustive, however it gives a clear view of some of the individual situations as they stand today:

The situation at AVX/Kyocero has been adressed by the headquarters and for more information please click AVX.

Renesas brand product has had a mixed impact on their capabilities.  Several plants have restarted production, while some have been temporarily shuttered.  More detailed information can be garnered here CEL.

Epson has significant manufacturing assets in Japan and has shuttered at least two plants and is assessing the situation rigorously and continuously.  More information can be gathered here Epson Toyocom.

Japan represents approximately 12% of their manafacturing capacity and FCI spokespersons have provided some detailed reports here FCI.

Freescale is working feverishly to assess damage, delays, power outages and other challenges facing their Japanese production facilities and their most recent updates can be viewed here Freescale.

Fujitsu has experienced damages to buildings and production equipment including the ceilings, walls, and drain pipes of the Fujitsu Group's plants and offices have affected business operations. Furthermore, planned rotational electricity blackouts have affected operations of Fujitsu Group companies based in the Kanto region of Japan.  More information is here Fujitsu.

Hirose has suffered some slight to severe damage which as led to some delays as well as some closures.  They have 70 locale supplier plants of which two have been completely destroyed.  The assessment of impact on total operations is still in progress and more can be read here Hirose home page.

Hitachi has suffered slight to heavy damage at several facilities.  They are also assisting in the repair to the nuclear power plant and are working in conjunction with the goverment and power agencies to get those assets back on line Hitachi

Murata Electronics has suffered significant delays and damage to several product families which can be reviewed on the above link.

NEC LCD Technologies operations, deliveries, and production have been temporarily halted with restart dates uncertain.  Updates are at the above.

Though there was limited damage directly to Omron assets there are a large number of Omron suppliers in the disaster area and we are working to assess the situation. We will contact you as soon as possible if we foresee any significant impact on production or supply Omron EMC

ON Semiconductor currently owns and operates a total of three production facilities in Japan, located in Aizu, Niigata and Hanyu. Additionally, the company operates another three production facilities leased from SANYO Electric Co. Ltd located in Gunma, Gifu and Kasukawa. Initial reports indicate all six sites have sustained only minimal physical damage and remain structurally sound as a result of the earthquake and tsunami. Production has been restored at Niigata, Gifu, Kasukawa and Hanyu and was initially restored at Aizu. However, infrastructure services such as fuel, electricity, gases, water, chemicals and logistics to ON Semiconductor’s factories and those of its customers and suppliers in Japan have nevertheless been impacted by the consequences of the earthquake and tsunami. Based on currently available information, this infrastructure disruption is now expected to result in a temporary shutdown of operations at the company’s Aizu and Gunma facilities until services can be reliably restored. The potential for intermittent supply of these services may cause temporary production disruptions at other locations as well. The company currently anticipates infrastructure services will improve towards the end of the first quarter. The company is identifying options to shift production to other facilities to support supply continuity for customers.  On Semi

Like many companies Optrex suffered only moderate damages yet the ongoing logistical challenges may ultimately prove more damaging to supplying customers per normal schedules Optrex

Panasonic appears to have suffered many of the challenges associated with logistics but appears to still be in the assessment stage prior to fully disclosing the situation at its various plants and facilities Panasonic

Powerex procures much of its supply in conjunction with Mitsubishi who have clearly been significantly affected in a number of areas.  At the bottom of the CEO is also the communication from Mitsubishi CEO detailing the situation in a more detailed manner Powerex

Rohm appears to be making headway but challenges with the water supply is having a negative effect on restart projections Rohm

Sanyo appears to have been affected yet their communications are understandably vague Sanyo Denki

TDK appears to have a number of sites that are offline at the moment with projections being unclear due to the rolling black-outs and other material disruptions associated with regional infrastructure challenges TDK

TI has suffered significant damage to it's Miho plant which represents about 10% of TI's worldwide capacity.  The company estimates it will reinstate production in stages, beginning with several lines in May and returning the factory to full production in mid-July, which translates to full shipment capability in September.  This schedule could be delayed if the region's power grid is unstable or if further complications prevent the re-start of equipment.  TI is moving quickly to shift production to other fabs and so far has identified alternate manufacturing sites for about 60 percent of Miho's wafer production.  Work is underway to increase this percentage by moving the production of additional products.  Texas Instruments

It would appear that  overall semiconductor production hasn't been as severely damaged as first thought, however analysts are predicting that the material supply, basic traffic reconstruction, and overall infrastructure challenges including rolling black-outs, water shortages, gasoline shortages and more, will have more of an impact on the supply of semiconductor (and associated finished goods products) than production line damage.