Mitsubishi to resume making chip packaging resin after quake

It will restart production of bismaleimide triazine, a component of the rigid substrate in chip packaging, next month

Mitsubishi Gas Chemical will restart production of a resin vital for chip packaging early next month, at a factory that was damaged by the March 11 earthquake in Japan.

The company reportedly produces around 50 percent of the world's supplies of bismaleimide triazine (BT), a component of the rigid substrates used in chip packaging. Without the chemical, supplies of many chips, including flash memory modules, would soon dry up.

Mitsubishi's Electrotechno Co. subsidiary will initially only restore production of BT to one fourth of pre-earthquake levels. As the company recovers from earthquake damage to equipment and buildings, a second stage of production will restart in May, the company said.

Siliconware Precision Industries, a chip assembler based in Taiwan, is encouraged by Mitsubishi's plans, said company spokesman Byron Chiang. But the company's supplier of BT substrates is looking for other sources of material in case of new production snags or new disasters, he said.

Taiwan's Advanced Semiconductor Engineering, the world's biggest chip assembly firm, welcomed Mitsubishi's announcement, as 80 percent of the material for its BT substrates comes from the Japanese supplier, a company spokesman said.

However, manufacturers of the tablet PCs, mobile phones and networking devices that rely on chips from those assemblers should not assume that the threat of a materials shortage has ended, analysts said.

"Factories may be OK, but no one knows how well the Japanese companies can do in terms of power supply," said Ian Peng, an analyst with DigiTimes Research in Taipei, referring to the electricity supply problems that followed the magnitude 9.0 quake off Japan's east coast.

Earlier in the month an expert with Bank of America Merrill Lynch forecast that BT substrates would be hard hit because Japan makes some 90 percent of the world's supply and top vendors had stopped taking orders. The other major supplier of BT is Hitachi Chemical.

"The capacity will be there, but it doesn't mean they will have full production," said Michael Clendenin, managing director of RedTech Advisors in Shanghai.

Mitsubishi and its peers may still see shortages of labor, power and input chemicals, he said, while some manufacturers that need material for substrates will not be guaranteed a supply as bigger, higher-paying customers get priority.

"The further down the foundry pecking order you are, the more challenges you will see," Clendenin said. As a result, he said, "some of the ability to get products shipped may be delayed."

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Tags Advanced Semiconductor EngineeringSiliconware Precision IndustriesComponentsMitsubishi Gas Chemical

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