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Shortage of epoxy resin expected after quake

Posted: 22 Mar 2011 ?? ?Print Version ?Bookmark and Share

Keywords:bismaleimide triazine resin? BT alternatives? BT epoxy?

Shortages of bismaleimide triazine (BT) resin, an epoxy resin used in chip package substrates including plastic BGA packages, could be one of the most daunting problems to arise from the supply disruptions triggered by the March 11 Japan earthquake, according to analysts.

Craig Berger, an analyst with FBR Capital Markets, said contacts in Asia warn of the possibility of a shortage of BT produced by back-end assembly and test firms. The resin is almost entirely produced by Mitsubishi Gas Chemical Inc. (MGC), according to Berger.

MGC said last week that two of its facilities, one in Fukushima prefecture and one in Ibaraki prefecture, shut down due to partial damage to equipment and buildings. The rolling blackouts currently in force in the region may affect future MGC operations, including operations at sites that were not damaged by the quake, the company said.

According to Japanese equity research firm Nomura Securities Co. Ltd, the two MGC facilities account for nearly all of the BT produced in the world. "This is an unfortunate coincidence where 90-100 percent of the world's supply of BT is made in northeastern Japan," said Shigeki Matsumoto, an analyst with Nomura, in a report released on March 16.

According to Nomura, not all of the world's ICs use BT, but the resin is used extensively in cellphone chipsets.

Berger said a shortage of BT would most impact programmable logic vendors Xilinx Inc. and Altera Corp., as well as Qualcomm Inc.

On March 16, Qualcomm said it does not foresee any significant impact on its ability to supply chips to customers following the earthquake. Qualcomm said it would use its buffer stock of BT and make short-term adjustments to its materials mix to mitigate potential shortages of BT. Qualcomm uses either BT-based or epoxy-based laminate materials in its chipset packages, the company said.

"There are a number of non-Japanese suppliers poised to take up the slack with alternatives to BT, but whether they can be qualified in time remains uncertain," said Nomura's Matsumoto.

Jan Vardaman, founder and president of TechSearch International Inc., said Hitachi Chemical Co. Ltd makes an alternative resinMCL-E-679that has been qualified by a few suppliers, but she said she has not been able to verify whether the production of that material was impacted by the quake. Several Hitachi manufacturing sites were damaged in the quake and remain idle.

"The bottom line is that the industry has not qualified a replacement material the supply of which is sufficient to alleviate in the short term the problem," Vardaman said. Aside from the physical damage suffered by plants, it is not known when regular power will be restored in the area, she added.

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