Texas Instruments expects revenue hit from earthquake damage to Japanese manufacturing plant
Monday, March 14, 2011; 7:09 PM
DALLAS - Chip maker Texas Instruments Inc. said Monday that "substantial" damage to one of its major manufacturing plants near Tokyo in last week's earthquake will result in extra costs and lost revenue in the first half of this year.
The Miho plant, which produces mostly analog chips but also makes digital light processing technology used in televisions and projectors, won't return to full production until mid-July. It handled about 10 percent of the semiconductor company's output by revenue last year. A second plant was damaged less severely.
The Dallas-based company has arranged to shift about 60 percent of Miho's production of silicon wafers to other plants. The company is looking to shift even more production. Texas Instruments didn't estimate the hit to revenue or the extent of costs in the first and second quarters. It will provide details when it reports first-quarter results on April 18.
The plant, located 40 miles northwest of Tokyo, will be returned to service in stages beginning in May. Full shipments will resume in September. That plan could be delayed if power is interrupted or other complications ensue. Japan began rolling blackouts to conserve power Monday as it tried desperately to stabilize nuclear reactors at risk of meltdown in the aftermath of the earthquake and tsunami.
Texas Instruments said the building is sound but warned that it will take about three weeks to repair systems for delivering chemicals and other supplies. Goods under production were damaged, although the company said it could salvage about 40 percent.
A second plant, at Aizu-wakamatsu, about 150 miles north of Tokyo, was not as heavily damaged. The company said equipment is being restarted and full production is estimated by mid-April. A third plant about 500 miles south of Tokyo escaped damage and is running at normal capacity.
Japan is home to a number of chip factories, with Japanese chipmakers alone accounting for about 20 percent of global semiconductor capacity. Earlier Monday, Barclays analysts said uncertainty around available chip supply could drive hoarding of certain chips, pushing prices higher.
The shares rose 17 cents to end regular trading at $34.56, but they fell 76 cents, or 2.2 percent, to $33.80 in extended trading on the news.
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