Japan quake endangers a quarter of world’s chip production

The Japanese quake has suspended the production of silicon wafers in that country, potentially endangering the world’s supply of chips, which are used in everything electronic.

Japan’s silicon wafer manufacturers supply about 25 percent of the global capacity for the key ingredient in semiconductor chips, according to market researcher IHS iSuppli. If those producers don’t return to production soon, prices for the silicon wafers could rise and a global shortage could result.

Silicon wafers are the raw material for semiconductors. Chip makers buy the wafers and process them in multibillion-dollar factories. Then they slice the wafers into individual chips, which are then used in everything electronic from smartphones to computers. Manufacturing operations have stopped at wafer producers Shin-Etsu Chemical Co. in Shirakawa Japan; MEMC Electronic Materials also stopped production in Utsonomiya. Those two factories account for 25 percent of the global supply of chips

Source: VentureBeat