Tech Stocks: UOB has sector report focusing on effects of Jap. Note that according to DRAMeXchange, Hitachi Chemical and Mitsubishi Gas Chemical produce more than 80% of Bismaleimide Triazine (BT) resin and both Co’s were affected by Jap earthquake. BT resin is used for producing laminates/substrates that packages semiconductor chips in mobile devices….
Mitsubishi Gas Chemical’s plant located at Nishishirakawa-gun within Fukushima prefecture will start partial production in early Apr at one qtr of pre-earthquake levels, focusing on semiconductor package substrate for mobile devices. For Hitachi Chemical, supply of electricity, gas and water has resumed for production sites at Ibaraki prefecture and Chiba prefecture.…..
Note that Semiconductor players could use either BT-based or epoxy-based laminates to package semiconductor chips. According to DRAMeXchange, another mitigating factor is that BT resin can also be purchased from Taiwan-based Formosa Plastics….
House maintains Overweight on Sector, with top picks as Hi-P (TP, $1.64) and Venture (TP $11.8 . Add that disruptions to the supply of components are usually short-term phenomenon. While house do not rule out further deterioration in the nuclear crisis in Japan, suppliers located outside the afflicted Fukushima Prefecture will have to resume normal operations. Nevertheless, the situation needs to be closely monitored.
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