UPDATE 3-Power cuts halt north Japan plants following aftershock

Fri Apr 8, 2011 4:07am EDT

* Sony suspends production at two plants

* Renesas halts output at four plants in northern Japan

* Elpida says one factory impacted by power outage in north

* Toshiba also affected, Panasonic confirming status of plants (Adds details, graphic and automakers)

By Isabel Reynolds

TOKYO, April 8 (Reuters) - Sony Corp , chip-maker Renesas and Elpida Memory said on Friday production at some plants in northern Japan had been halted again after a major aftershock shook the region a day earlier, triggering power cuts.

The stoppages are the latest blow to manufacturers, who had hoped to quickly restore supply chains after the devastating earthquake and tsunami last month savaged the region and halted distribution.

"It (an earthquake) could happen again and that means you can't really proceed with reconstruction," said Yuuki Sakurai, CEO of Fukoku Capital Management, adding that many firms were hesitant as to how to proceed.

"They have to be very careful. They need thoughtful planning. They need to be doubly, triply solid against the next earthquake. So it will cost a lot and you have to consider whether it is worth rebuilding," he said.

Renesas, the world's largest maker of microcontroller chips and a supplier to the auto industry, said four plants in northern Japan, including two microcontroller factories, had been halted by the power blackout.

A company spokeswoman said it was not clear when manufacturing would resume, although power had been restored to one plant.

Sony said production had been suspended at two plants in Miyagi prefecture. The two sites, which make optical devices and IC cards, had resumed partial production at the end of last month after the disaster.

Sony said it resumed output at a semiconductor laser factory, also in the northern prefecture of Miyagi, after having briefly suspended production for inspections.

Japan's top three automakers, Toyota Motor Corp , Nissan Motor Co and Honda Motor Co said they were looking to restart production at different times this month, albeit at half their originally planned volumes for now. Those plans take into account the impact of Thursday's aftershock.

Elpida, the world's No.3 maker of DRAM chips, said one factory in the northern prefecture of Akita had been halted by the power outage.

There had been no injuries or damage to equipment and the plant would be re-started when power was restored, the company said on its website.

Thursday night's magnitude 7.4 quake shook the devastated coast of northeast Japan and Jiji news agency said two people were killed.

Electronics conglomerate Toshiba said the power blackout was affecting a microcontroller chip plant in the northern prefecture of Iwate. It was not clear whether Thursday's quake would delay the re-start of this plant, which is scheduled for April 11, a company spokeswoman said.

Rival electronics firm Panasonic Corp said it was still confirming the status of its northern Japan plants, all but one of which had resumed operations following the March disaster.

Investors shrugged off the production worries, however, sending Japanese stocks to their highest close since the earthquake, as a rebound in Tokyo Electric Power Co buoyed sentiment and encouraged buying of other battered shares.

Elpida rose 2.2 percent, while Renesas jumped 3.7 percent and Toyota added 1.4 percent. The benchmark Nikkei gained 1.9 percent . (Reporting by Isabel Reynolds; Editing by Dhara Ranasinghe and Vinu Pilakkott)

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