Impact of the Major Earthquake in Northern Japan on Torex: Latest Status Update

Mar 17, 2011

As previously reported, the majority of our production plants are operating normally and in the main, our ability to manufacture and supply has not been adversely affected by recent events.

However, we can confirm that the two manufacturing facilities operated by our production partners continue to experience difficulties. One facility is a Wafer Fab and the other a Packaging Plant. Both are located near the Earthquake zone, but thankfully they were not within the area of maximum devastation. Please find the latest news from each plant below:

Wafer Fab: There appears to be no damage to infrastructure at the Fab, but production has been stopped due to lack of power. Power to the plant has now been restored but because the power available is limited, our partner is unable to carry out a full inspection of the production equipment. Once a reliable power supply is available the equipment can be tested and production can resume. We are in close contact with the facility and we will issue updates as we get more news.

The disruption at the Wafer Fab will affect our ability to supply a small number of product families. Over the coming days we will contact all customers who may possibly be affected to discuss the situation in more detail. Today Torex has adequate Wafer stocks to cover all deliveries till the end May (based on current customer forecasts) and if normal power supply is resumed quickly, we will be able to minimise any possible disruption.

Packaging Plant: The packaging company has discovered some minor structural damage, but the plant is hoping to restore normal operation shortly. As with the Fab, the packaging company is also affected by the power shortages, but they continue to make the necessary equipment tests and so far they are confident that production can resume once reliable power is available.

Raw material supply may also be disturbed and our Packaging partner is checking with their supplies to gauge the extent of the problems. Many of their supplies are located around the earthquake zone and communication is sometimes difficult, so we need to be patient.

Fortunately Torex works with a number of different packaging companies and we are now asking our other facilities for their co-operation in order to be able to continue to meet our customer's demands. With their help we do not anticipate any delays due to packaging today.

In summary, we are confident that any delays can be minimised and in the main our production is operating normally. We will contact all customers that may be affected by the disruptions at the Wafer Fab over the coming days and with your support we will work through this difficult time together.

As you can imagine, the situation is still volatile and we will continue to monitor events and provide updates as and when we have news. We ask for your continued patience and support over the coming days.

TOREX SEMICONDUCTOR LTD.

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