Second deadly quake prolongs production halts in Japan's southern manufacturing hub
16/04/2016 06:15
TOKYO, April 16 (Reuters) - Japanese companies including
electronics giant Sony Corp 6758.T and Honda Motor Co 7267.T
extended production halts on Saturday after a second powerful
earthquake struck a key manufacturing hub in southern Japan.
Sony said it will extend the closure of its image sensor
plant in Kumamoto located in the southern island of Kyushu. It
had already shut the plant after an initial deadly quake rocked
the region on Thursday. urn:newsml:reuters.com:*:nL5N17I4LS
The PlayStation maker said operations at its image sensor
plant in Nagasaki, also in Kyushu, will be partially suspended
too. Sony is assessing damage at the two plants and does not yet
have a timeline for resuming operations.
Sony controls about 40 percent of the market for
complementary metal-oxide semiconductor (CMOS) image sensors, a
type of integrated circuit that converts light into electrical
signals. The company is a major supplier to Apple Inc's AAPL.O
iPhones.
"We are still checking for potential damage to the plants,
which usually operate on a 24-hour basis," a Sony spokesman told
Reuters. "We do not yet know how the closures will impact supply
to customers like Apple."
A devastating earthquake and tsunami in northern Japan in
March 2011 temporarily knocked out part of Japan's auto supply
chain. Some companies have since adjusted the industry's "Just
in Time" production philosophy to limit any repeat of that
costly disruption. urn:newsml:reuters.com:*:nL3N17I3CF
Other electronics makers were also forced to stop production
in Kyushu, which has grown as a manufacturing hub over the past
two decades. Kyushu accounts for roughly 25 percent of
semiconductor output in Japan by some estimates.
Renesas Electronics Corp 6723.T closed its plant in
Kumamoto, which produces microcontroller chips for automobiles.
It will not resume production until it completes its damage
assessment.
Mitsubishi Electric Corp 6503.T halted production at its
two plants in Kumamoto which produce parts including liquid
crystal display modules. It has no timeline for resuming
production.
Saturday's natural disaster also impacted major automakers,
which had just stopped their production lines to inspect for any
damage from Thursday's earthquake.
Honda Motor Co Ltd 7267.T halted production at its
motorcycle plant in Kumamoto with an annual production capacity
of 250,000. It said it will keep production on hold through
Monday.
Toyota Motor Corp 7203.T halted production at three plants
producing vehicles, engines and transaxles in Fukuoka. Toyota
said there was no damage at its plants, but it was checking the
status of its suppliers. It will decide on Sunday whether to
resume production.
Nissan Motor Co Ltd 7201.T stopped production at its
Fukuoka plant which produces vehicles including the Serena,
Teana, Murano and Note.
Kumamoto prefecture account for about 1.1 percent of
Japanese GDP, compared to the combined 6.2 percent of the four
prefectures which suffered the heaviest damage from the 2011
natural disaster, according to strategists at Barclays.
"A relatively higher proportion of Kyushu's economic
activity takes place within the region itself. Therefore
economic impact on the rest of Japan stemming from any damages
to Kyushu's manufacturing activity will be limited," Barclays
wrote in a note to clients.
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FACTBOX-Companies affected by southern Japan quakes
urn:newsml:reuters.com:*:nL3N17J030
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(Reporting by Naomi Tajitsu, Makiko Yamazaki and Kentaro Hamada
in Tokyo; Writing by Shinichi Saoshiro; Editing by Lincoln
Feast)
((shinichi.saoshiro@thomsonreuters.com; Reuters Messaging:
shinichi.saoshiro.reuters.com@reuters.net))
Keywords: JAPAN QUAKE/COMPANIES