The impact of the massive earthquake that hit Kumamoto Prefecture in southwestern Japan on Tuesday continues to be widely felt in Kyushu, with operations halted at many factories across the region.
Kumamoto Prefecture is a hub for semiconductor-related factories. Semiconductors are essential for many industrial products, and any disruption in supply could deal a blow to a wide range of domestic industries.
Following the earthquake, Renesas Electronics Corp. suspended operations at its Kawashiri factory in Kumamoto City and its Nishiki factory in the town of Nishiki, which produce automotive semiconductors and other products. Ceiling panels have fallen and water leaks have been confirmed at the factories, and the company is currently inspecting the production facilities.
Mitsubishi Electric Corp. also paused operations at its plants in the cities of Koshi and Kikuchi, which manufacture power semiconductors.
Sony Group Corp. has stopped work at its image sensor factory in the town of Kikuyo, while Tokyo Electron Ltd. has halted operations at its semiconductor manufacturing equipment plants in Koshi and the town of Ozu.
Following the announcement that Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest semiconductor foundry, would establish a presence in Kumamoto Prefecture in 2021, related companies have entered the prefecture.
The presence of the semiconductor industry and its impact on the local economy have grown since the time of the 2016 Kumamoto Earthquake. The development of housing and commercial facilities in the surrounding areas is also progressing in keeping with population growth.
On Wednesday, TSMC issued a statement regarding its factory in the town of Kikuyo, which was affected by the earthquake.
TSMC said that it would continue to inspect and adjust its manufacturing equipment, but that it would take some time.
According to estimates released last December by a research institute affiliated with Higo Bank Ltd., Kumamoto Prefecture's nominal gross prefectural product for fiscal 2026 was projected to reach 7.12 trillion yen -- a 2.5% increase from the previous fiscal year and a new record high. The report predicted that the semiconductor industry would drive economic growth, partly due to the ongoing construction of TSMC's second factory.
"Kyushu, including Kumamoto, is a 'silicon island' where semiconductor factories are concentrated, and its supply chains extend nationwide," said Toshihiro Nagahama, chief economist at Daiichi Life Research Institute Co. "If operations are disrupted, the impact on industries that use semiconductors, such as the automotive sector, will be unavoidable."
Facilities such as Renesas' Naka factory in Ibaraki Prefecture were damaged during the 2011 Great East Japan Earthquake. The resulting shortage of semiconductors used for electronic control in automobiles forced automakers worldwide to temporarily suspend or reduce production.
Other industries also affected
Manufacturers in other industries are also suspending factory operations.
On Wednesday, Honda Motor Co. decided to suspend operations until Friday at its Kumamoto plant in Ozu, which serves as its sole domestic production base for motorcycles. This decision was made in light of the need to carry out repairs for water leaks and flooding that occurred inside the plant.
Honda will decide whether to resume operations from Monday or later, based on the situation at that time. When the plant was damaged in the 2016 Kumamoto Earthquake, it took nearly five months to return to pre-disaster production levels.
Yamaha Motor Co. also has two factories in Kumamoto Prefecture operated by its subsidiary Yamaha Marine Co., which manufactures outboard motors and other products -- both paused operations on Wednesday. Ground liquefaction was also confirmed at the factory in Yatsushiro.
Bridgestone Corp. has halted operations at its factory in Tamana, which manufactures rubber products used in construction machinery. There is no timeline yet for resuming operations at Nippon Paper Industries Co.'s mill in Yatsushiro, where chimneys collapsed and there were casualties.
Suntory Holdings Ltd. suspended operations on Wednesday at its Kyushu Kumamoto Plant in Kashima, which produces beer and soft drinks, and has not decided when to resume production. With product shipments stopped or delayed primarily from this plant, Suntory Holdings is reportedly considering supplying products from other production sites.
After the 2016 Kumamoto Earthquake, it took about a year and a half for production and shipping to return to normal.
Duskin Co. paused operations on Wednesday at its Kumamoto central plant in Mifune, where some buildings and equipment sustained damage. The company said that operations would not resume on Thursday, and the mop and mat cleaning operations previously handled at that plant will be handled by neighboring plants.
Work halted despite no damage
Some factories are being forced to halt operations even though they have not sustained any damage.
Toyota Motor Corp. suspended operations at three factories in Fukuoka Prefecture from Wednesday evening through Friday. Although operations resumed briefly on Wednesday morning, the company has decided to halt production again in light of logistics conditions and other factors.
It was unclear whether operations would resume on Monday or later.
Nissan Motor Kyushu Co. decided to suspend some of the operations at its plant in Kanda, Fukuoka Prefecture, from Thursday afternoon through Friday. Here too, the suspension was prompted by disruptions in the supply of parts; the production facilities themselves were undamaged.
Akio Yamaguchi, chairperson of the Japan Association of Corporate Executives and president of IBM Japan Ltd., said at a regular press conference on Wednesday that if supply chains are disrupted, "economic output will stagnate significantly due to the failure to deliver necessary parts and goods."
"We are in contact with local companies and others to see if there is anything we can do to provide support," Yamaguchi said.
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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