Japan’s auto and chip manufacturers halted production yesterday at plants on the island of Kyushu struck by a deadly earthquake that disrupted operations in a region key to the supply chains of both industries.Toyota Motor Corp said it would halt operations at three plants in the region through tomorrow as it weighed the quake’s impact on suppliers and logistics, just hours after resuming production it had stopped the previous day.Tuesday’s 7.1-magnitude quake in the Kumamoto region damaged roads and knocked out power to thousands of homes, raising concerns about supply chains and logistics and affecting other manufacturers besides Toyota.
Sony Semiconductor Manufacturing Corp’s Kumamoto Technology Center is pictured in Kikuyo, Kumamoto Prefecture, yesterday.
“The situation, including aftershocks and recovery efforts, is changing daily,” the world’s biggest automaker said in a statement about the suspensions at its Miyata, Kanda and Kokura plants from yesterday until July 31.Kyushu is a key base for Japan’s automotive and semiconductor industries, which account for roughly two-fifths of regional industrial output, Japan’s Ministry of Economy, Trade and Industry says.
However, analysts said factory shutdowns at automakers and chip manufacturers appeared to be driven largely by precautions for workers, rather than by damage to production facilities.“The negative impact on production activity and supply chains will likely be relatively temporary,” Nomura Research Institute executive econmist Takahide Kiuchi said.By contrast, the 2011 Tohoku earthquake temporarily crippled part of Japan’s auto supply chain, disrupting the industry globally.Toyota makes a wide range of Lexus luxury models at its Miyata plant, which has annual production capacity of about 430,000 vehicles, and hybrid car units and engines at the other two.Honda Motor Co said it would extend an operation suspension at its Kumamoto motorcycle plant, also until tomorrow, to allow repairs to quake-damaged parts of the factory.Kumamoto has attracted chip investment from leading players such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) in recent years.The world’s largest contract chipmaker evacuated staff at the Kumamoto fab of its Japanese unit, Japan Advanced Semiconductor Manufacturing Inc (JASM), following the quake.All personnel were safe, TSMC said on Tuesday, while it is inspecting facilities and assessing the quake impact.Chipmaker Renesas Electronics Corp said it halted operations at two Kumamoto plants, which had suffered fallen ceiling panels, cracks in walls and some water leaks.Nissan Motor Co said it had no plans for a suspension at its plant in Fukuoka, north of Kumamoto, where it makes the Rogue SUV, known locally as the X-Trail, but added that it was monitoring its supplier and logistics situation.On Tuesday, Sony Group Corp said it had evacuated employees and halted operations at its semiconductor-making facilities in Kumamoto. Tokyo Electron Ltd said it had not confirmed any major damage at two plants there.Kiuchi said the earthquake’s economic impact was likely to be smaller than that of recent major Japanese quakes since it caused relatively slight damage to homes and infrastructure.Losses were likely to keep below 1 trillion yen (US$6.11 billion), he estimated.
