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MEMC Resumes 300 mm Wafer Production at Facility in Japan

Production of 300 mm wafers has resumed at the MEMC Electronic Materials' Inc. facility in Utsunomiya, Japan, but full production won't be achieved until the middle of May, the company reported. The plant had been closed since March 11, when the earthquake damaged the facility and its equipment.

The facility has resumed production on qualified process tools, while company employees continue to inspect, qualify, and ramp additional equipment. Production yield on operating tools is similar to pre-earthquake levels, according to MEMC, based in St. Peters, Mo.

Company officials said that so far, raw material availability has been good and power availability has improved. In addition, the facility's small volume of 200 mm wafer capacity, previously scheduled to be moved to the company's Ipoh, Malaysia site during the third quarter of 2011, will be moved ahead of schedule, although an exact date was not specified.

MEMC's Utsunomiya facility was one of several wafer plants that were shut down because of the earthquake and tsunami in Japan.

Production at Shin-Etsu's plant in Fukushima also ceased following the quake, and the facility remains closed. Restoration work at the facility and equipment repairs are occurring and operations should resume within a short period of time, the company reported in a statement. Shin-Etsu added that it has started shipping wafers that were produced before the quake and held in inventory.

Wafer production has been partially restarted at SUMCO's 300 mm facility in Yonezawa. The plant had suspended operations after the quake. Company officials said that back up production of wafers has started at other facilities.

Industry analysts, suppliers, and buyers are concerned there could be a shortage of semiconductors later in the year if large-volume wafer production at the affected facilities doesn't resume soon.

Researcher DRAMeXchange in Taiwan noted that worldwide silicon wafer supply is short 20 to 25 percent because of the Japanese wafer facility shutdowns. There is about one month of wafer inventory on hand, and with current production levels there should be few problems with wafer supply through the second quarter, according to the researcher.

However, there could be problems if Shin-Etsu and other wafer producers aren't able to resume production for an extended period of time.

If there are shortages of wafers, buyers can expect semiconductor companies to focus on higher-value products instead of lower-margin, commodity products.

For instance, Samsung plans to move some DRAM capacity to NAND products because there is a better outlook for NAND than DRAM in 2011, according to DRAMeXchange.

Elpida has already suspended commodity DRAM production in Hiroshima and is maintaining the high-value mobile DRAM production.