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Author has a degree in Engineering and is an avid investor in the market. Experience in industrial materials and structures. In college studied atomic & nuclear physics as well as material engineering. Eastern European
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  • Japanese companies loss is another's Gain in the Tech World. 0 comments
    Mar 14, 2011 2:02 PM | about stocks: SUNE, SNDK, AAPL, BRCM, QCOM, MU, INTC, AMD, AMAT, TXN, SNE, TOSBF, HPQ, DELL, SSNLF, NOK, VOD, ERIC, GOOG, MSI
    MEMC Surges on Speculation That Japanese Disruptions Will Boost Its Demand
    By Ian King - Mar 14, 2011 1:05 PM ET Mon Mar 14 17:05:05 GMT 2011

    MEMC Electronic Materials Inc. (WFR), the maker of silicon wafers for semiconductors and solar panels, surged 14 percent on speculation that Japanese supply disruptions will drive up demand for its products.

    Japan, devastated by an 8.9-magnitude earthquake last week, accounts for more than 50 percent of the world’s supply of the wafers, the building block of the chip and solar industries, according to a report by Barclays Capital. While MEMC has some operations in the country, it also has facilities in the U.S., Europe and other parts of Asia, insulating it from the disaster.

    Supply disruptions will increase prices for silicon wafers and squeeze chipmakers, which may have to raise their own prices if they want to preserve profitability, according to Barclays. The Japanese quake and resulting tsunami has killed thousands, and left millions without electricity and water.

    MEMC rose $1.71 to $13.73 at 12:31 p.m. on the New York Stock Exchange, the biggest intraday gain in almost six weeks. Shares of the St. Peters, Missouri-based company had climbed 6.7 percent this year before today.

    Barclays also raised concern that makers of smartphones and their components will be harmed by shortages of capacitors made in Japan. If phone production slows, it may hurt Qualcomm Inc. (NASDAQ:QCOM) and Broadcom Corp. (NASDAQ:BRCM), which make chips for the devices, said Tim Luke, a Barclays analyst in New York.

    Japan also is home to Toshiba Corp. (6502), which accounts for about 30 percent of the world’s output of so-called Nand flash- memory chips, according to the Barclays report. Nand handles storage for Apple Inc.’s iPhone, iPad and other mobile devices. Disruptions in those supplies may benefit Boise, Idaho-based Micron Technology Inc. (NASDAQ:MU), Luke said in the report.

    On March 11, SanDisk Corp. (NASDAQ:SNDK), which has a joint venture with Toshiba, said the earthquake in Japan caused a temporary halt to production in its two Japanese plants. The factories were “down for a short period” and are now operational again, the company said.

    To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

    To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

    --------------------------------------------

    Foundries brace for impact of wafer shortage
    DIGITIMES [Monday 14 March 2011]

    With the impact of Japan's massive earthquake disrupting production at silicon wafer supplier Shin-Etsu Handotai (NYSE:SEH), major pure-play foundry chipmakers Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (NYSE:UMC) have both said that they are capable of activating alternatives if necessary.

    SEH's parent company Shin-Etsu Chemical has revealed that operations at several production sites, including SEH's Shirakawa plant in Nishigo Village, @#$%ushima Preference, remain closed due to the quake's impact which has shutdown electric power supply in the area. A restart of operations can only begin after a safety inspection of equipment and the facilities, Shin-Etsu said, without disclosing any timeframe.

    SEH's monthly 12-inch wafer capacity is estimated at about 1.2 million units, of which 800,000 are produced at the Shirakawa plant. Market observers have expressed concern that a supply shortage of 12-inch blank silicon wafers could surface.

    Topco Scientific, a major distributor for SEH in Taiwan, has responded saying that it is still waiting for further updates from the supplier. Due to disruptions in power following the quake, operations at SEH's Shirakawa plant have not yet been restored, Topco indicated.

    TSMC noted that the company has reached its supply partners in Japan, and information provided so far indicates that TSMC's orders placed earlier should not be impacted. TSMC added that wafer inventory remains at a sufficient level.

    TSMC reportedly also sources silicon wafers from non-Japan-based suppliers including MEMC Electronic Materials, Siltronic and Formosa Sumco Technology (NYSE:FST).

    UMC indicated that in addition to Japan's SEH and Sumco, the foundry has also secured silicon wafer supplies from MEMC and Siltronic. Meanwhile, SEH has production sites overseas that help the company ease any supply tightness. UMC estimated that the impact on its suppliers will not be significant.

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