AKM Semiconductor Audio DAC and ADC Production Disrupted by Fire

November 4 2020, 18:10
After a major fire destroyed the Asahi Kasei Microdevices (AKM) semiconductor factory in Nobeoka, Miyazaki Prefecture, Japan, the company still has to provide a report on the disruption that this major disaster will cause to its business, particularly affecting the supply of critical DAC and ADC chips that are used by many high-end audio and studio equipment manufacturers. Non-confirmed reports state the company is already preparing to outsource production of the analog/digital LSI circuits exclusively produced at this facility.

The major fire that affected the Asahi Kasei Microdevices manufacturing facility in Nobeoka City was reported originally by the local Miyazaki Nichinichi Shinbun newspaper, and the details available from Japanese media confirm that the factory will not be able to resume production anytime soon. 

According to the newspaper story, the fire broke out on the afternoon of October 20, and was nearly contained two days later when it broke out again at night, this time on the 5th floor of the building, causing part of the roof and walls to collapse. The company sent an apology to Japanese media, "for the great concern and inconvenience caused to many people, including local residents, customers, related companies, and related authorities." AKM also emphasized that its other factories are not affected by the fire.

The cause of the fire is unknown. Apparently, flammable gas used in the manufacturing process of the integrated circuits prevented access to ignition areas, and was the cause for the long duration and high destruction level caused to the building. No injuries among the 400 employees, which had been evacuated, was reported.
Source: www.the-miyanichi.co.jp

The specific impact on production and supply is not yet fully understood but it holds the potential to strongly disrupt the plans for many audio companies who use AKM devices. Probably not affecting their immediate needs but certainly into 2021. The AKM Group does have a number of different facilities both in Japan in other countries, but the manufacturing of those specific audio devices, which include different classes of audio converters was totally centralized on the Nobeoka operation. Outsourcing to meet existing demand will be a challenge, given that many of the companies processes might be difficult to replicate elsewhere in a short time frame, and providing the assurance that the company's IP will remain under control.

Several different companies in the audio and electronics industries already confirmed their anxiety that products produced at this factory and used in many of their products will not be easy to replace, and that delays in delivery will result. Several small audio companies are expressing concern, and until a full evaluation of existing inventory within the supply chain takes place, it will be difficult to understand the immediate effects.

Chinese semiconductor distributors already reported that they expected limited availability on various AKM DAC, ADC and Sample Rate Converters, all made exclusively at the Nobeoka plant. Those distributors are the source for the information that AKM is preparing to outsource production, and that AKM is consulting with manufacturing contractors to evaluate production alternatives. Major electronic component online retailers are also now showing limited availability of certain more recent devices. 

audioXpress will continue to follow the story and will update this post.
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