Quakes disrupt Sony output of image sensors used in iPhones

April 16, 2016 11:46 pm | Updated October 18, 2016 02:39 pm IST - TOKYO:

People walk out from Sony Corp's headquarters in Tokyo December 9, 2008. Japan's Sony Corp said it will slash about 4 percent of its workforce, scale back investments and pull out of businesses as it aims to cut $1.1 billion in costs out of its ailing electronics operations.   REUTERS/Toru Hanai (JAPAN)

People walk out from Sony Corp's headquarters in Tokyo December 9, 2008. Japan's Sony Corp said it will slash about 4 percent of its workforce, scale back investments and pull out of businesses as it aims to cut $1.1 billion in costs out of its ailing electronics operations. REUTERS/Toru Hanai (JAPAN)

Electronics giant Sony Corp said a factory producing image sensors for smartphone makers will remain closed while it assesses the damage from two deadly earthquakes which hit southern Japan. One of its major customers is Apple, which uses the sensors in its iPhones.

Sony said it would extend the closure of its image sensor plant in Kumamoto, which is in the southern island of Kyushu, after major tremblors on Thursday and Saturday rocked the key manufacturing region.

The PlayStation maker said operations at its image sensor plant in Nagasaki, also in Kyushu, would be partially suspended and it does not yet have a timeline for full resumption of operations.

Sony controls about 40 per cent of the market for complementary metal-oxide semiconductor (CMOS) image sensors, a type of integrated circuit that converts light into electrical signals. In smartphones they are used to convert images into digital data.

“We are not expecting any immediate supply disruption as we have some inventories right now,” a Sony spokesman told Reuters on Saturday. “We will make an announcement promptly if any supply issues emerge.”

He said the company was hoping to resume operations as soon as aftershocks end, and would probably provide an update on late Monday afternoon. “We are still checking for potential damage to the plants, which usually operate on a 24-hour basis,” he said.

Apple could not be immediately reached for comment.

Sony has two other CMOS image sensor plants in Japan.

Samsung Electronics says it has diversified its sources for image sensors used in its smartphones and the quakes will have no impact on its flagship products. 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.

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 per cent of semiconductor output in Japan by some estimates.

Renesas Electronics Corp closed its Kumamoto plant, which produces microcontroller chips for automobiles. It will not resume production until it completes its damage assessment.

Mitsubishi Electric Corp halted production at its two Kumamoto plants, which produce liquid crystal display modules used in display panels for car navigation systems and semiconductor chips used in power inverters for various electrical products, including air conditioners and hybrid or electric vehicles. It uses some of the products itself and provides others to customers.

“We are still assessing the situation as we continue to have aftershocks,” said a Mitsubishi spokesman.

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. halted production at its Kumamoto motorcycle plant, which has annual production capacity of 2,50,000. It said it would keep production on hold through Monday.

Toyota Motor Corp halted production at three plants producing vehicles, engines and trans axles in Fukuoka.

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