Japan’s stalled chip sector ‘to cost $470 Billion’

TOKYO – The cost to the global economy of Japan’s stalled computer chip industry remaining shuttered into May could be almost half a trillion dollars, a report said Saturday.

Manufacturers across Japan have closed down production lines or cut back their output because of direct damage or supply chain problems caused by the earthquake and tsunami that struck the northeast on March 11.

The Nikkei newspaper, citing a government estimate, said the knock-on impact on the global economy — caused by stalled production in companies that use Japanese-made parts as well as in related industries — could be 40 trillion yen ($470 billion).

Renesas Electronics Corp., the largest maker of micro controllers, sustained damage to its plant in Ibaraki prefecture in the 9.0 magnitude quake.

Car manufacturers worldwide could take a 6.5 trillion yen hit if production of the key auto part does not resume until the end of April, the paper said.

One of the world’s leading silicon wafer producers, Shin-Etsu Chemical Co., has a subsidiary factory in Fukushima prefecture, which was damaged by the disaster.

If that factory stays closed for six weeks, the damage to semiconductor production worldwide could reach roughly 1.5 trillion yen, the Nikkei said.

The hit to flat-panel television production is estimated at about 400 billion yen.

The impact on related industries, including the electronic machinery, telecommunications, Internet and broadcasting sectors, could reach about 32 trillion yen, it said.

In this article