Japan Gas Plant Fire Spurs Fears of Chip Supply Chain Disruption

A fire at Japanese industrial gas maker Kanto Denka Kogyo Co.’s factory is spurring concerns about possible disruptions to the semiconductor supply chain.

Last week, a fire broke out at Samsung Electronics Co. and Kioxia Holdings Corp. supplier Kanto Denka’s nitrogen trifluoride plant in Shibukawa in Gunma Prefecture, northwest of Tokyo. One worker died and another was injured, according to the company.

One of the plant’s two production lines sustained partial damages and operations have been suspended by authorities, a company representative said. Nitrogen trifluoride is a toxic gas used to clean substrate processing chambers during chipmaking.

Kioxia sees no immediate impact on production or July-September earnings, because it can tap other sources for gas and has remaining inventory, a spokesperson said. A representative of Sony Group Corp.’s semiconductor unit declined to comment, saying that the company does not disclose its suppliers.

The Tokyo-based company’s customers include Sony and Micron Technology Inc. in addition to Samsung and Kioxia, according to Kazuyoshi Saito, senior analyst at Iwai Cosmo Securities.

If the plant remains closed for a prolonged period, “this may exacerbate a capacity squeeze at manufacturers that are operating at maximum utilization rates to meet artificial intelligence demand,” he said.

Kanto Denka comprises 90% of Japan-made nitrogen trifluoride. In May, Mitsui Chemicals Inc. said it plans to halt production at the end of March, citing intensifying price competition and higher raw materials costs.

Top photo: One of the plant’s two production lines sustained partial damages and operations have been suspended by authorities. Photographer: Tomohiro Ohsumi/Bloomberg.