Key facts
- A 7.1-magnitude earthquake struck southern Japan on July 29, causing at least 34 deaths.
- The quake disrupted manufacturing supply chains, particularly in the auto and semiconductor sectors.
- Toyota suspended production at multiple plants due to parts shortages from impacted suppliers like Aisin.
- Nissan and Mitsubishi Motors also halted some production due to parts delivery delays.
- Semiconductor firms like TSMC, Renesas, Tokyo Electron, and Sony reported impacts, with some resuming operations.
- The region is known as Japan's "Silicon Valley" due to its concentration of semiconductor firms.
A powerful 7.1-magnitude earthquake struck southern Japan on July 29, causing at least 34 fatalities and disrupting critical manufacturing supply chains, particularly in the automotive and semiconductor industries. The quake exposed vulnerabilities in the region, often referred to as Japan's "Silicon Valley" due to its concentration of chip firms.
Automakers have been significantly affected. Toyota, for instance, has suspended production at three plants in Fukuoka and one in Aichi, citing safety concerns and the situation with distribution companies and suppliers. Aisin, a vital supplier of parts for Toyota, Daihatsu, and Nissan located near the earthquake's epicenter, has also been impacted and is preparing for a sequential restart of its operations.
Nissan has paused some production at its Kyushu vehicle plants due to delayed parts deliveries, while Mitsubishi Motors has halted some operations at its Okayama plant. The semiconductor sector has also seen disruptions. Taiwan Semiconductor Manufacturing Co (TSMC) evacuated its Kumamoto plant but has since resumed operations. Chipmaker Renesas plans to restart its Kumamoto plant in phases from August 5, while Tokyo Electron aims to resume production next week. Sony is also working to restart its semiconductor facility in Kumamoto.
While economists do not anticipate a disruption on the scale of the 2016 quake in the same region, which severely damaged the Aisin plant and led to nationwide production halts for Toyota, the current event highlights ongoing challenges for manufacturers in building disaster resilience. The impact on second- and third-tier suppliers is also being assessed.