Texas Instruments suffers damage in Japan earthquake

Texas Instruments on Monday said its manufacturing site in Miho, Japan suffered substantial damage during last Friday's 8.9 magnitude earthquake.

The company says it will reinstate production at the facility, located about 40 miles northwest of Tokyo, in stages: in May, several lines; by mid-July, full production, therefore ensuring shipments by September.

TI warned that this schedule could be delayed if the power grid in the region remains unstable.

In the meantime, the company says it's moving quickly to shift production to other fabs. So far, it has identified alternate manufacturing sites for about 60 percent of the facility's wafer production.

Damage includes:

• The infrastructure systems that deliver chemicals, gases, water and air. Repairs should be complete in about three weeks.
• Uncertainty about manufacturing equipment; it's unclear until continuous power is available.
• Work-in-process. About 40 percent can be recovered to support customers, the company says.

The building itself suffered little damage and remains structurally sound, TI says.

Here's why it matters so much: the Miho fab produced about 10 percent of Texas Instruments' output as measured by revenue in 2010. (More than a third was DLP; the remainder, analog).

The company expects more expenses and loss of revenue beginning immediately, and it said it expects to offer financial impact in more detail at the time of its first-quarter earnings report on April 18.

One more thing: TI's fab in Aizu-wakamatsu, about 150 miles north of Tokyo, was also damaged in the earthquake. Equipment there already is being restarted and full production is estimated by mid-April, assuming a stable power supply.

(The company's third fab in Hiji, about 500 miles south of Tokyo, was undamaged. It's currently running at normal capacity.)

Photo: TI's Miho fab, top; Aizu, bottom.