Japanese manufacturers control about two-thirds of the market for optical glass used in digital imaging and are especially dominant in the high-end materials used in lenses for sophisticated single-lens reflex (SLR) cameras.
Both Ohara Inc and Hoya Corp , the top two producers, said they were curtailing output due to an unstable supply of electricity from Tokyo Electric , which is imposing rolling blackouts and asking firms to curb power use.
"There is no timeline yet for returning to normal," said Ohara investor relations official, Kyohei Yonekura, referring to the company's flagship Sagamihara factory in Kanagawa, west of Tokyo.
Uncertainty about power supplies is raising concerns about long-term effects on a broad range of manufacturers, with the government urging industry bodies to come up with energy-saving plans for the summer, when electricity demand peaks.
Optical glassmakers could be among the most vulnerable users because, as in making silicon wafers, the process requires an uninterrupted supply of electricity.
The main optical glass manufacturing plants are in the Tokyo region, where power shortages are expected to worsen in the hot summer months. Blackouts could also spread to the northeast, where some smaller glassmakers are based, if demand rises as the region rebuilds.
"It's going to be tough," said Yoshikazu Higurashi, an analyst at Deutsche Bank in Tokyo. "They won't be able to produce properly unless something is done about the power cuts."
Higurashi said glassmakers would need to try to reach agreements on power to allow them to keep their furnaces going, perhaps in exchange for closing other plants.
"There's nothing they can do under the current blackout system, but if they can agree a different scheme, they may be able to cope."
SUPPLY SWITCH UNLIKELY
Hoya said this week it had suspended some production of optical glass due to power cuts imposed by Tokyo Electric, which is struggling to get its crippled Fukushima Daiichi nuclear plant under control. It has also lost a second nuclear plant in Fukushima and numerous thermal plants, knocking out 23 percent of its generating capacity.
"We've switched off our (electric) furnaces, because we can't switch them off only when the power cuts come," said a Hoya spokeswoman. Hoya said it was continuing to operate gas-powered furnaces.
Ohara, which supplies Canon, said it was producing below its normal rate and that deliveries to customers could be affected.
Both glass firms said they were digging into inventories to try to maintain supplies to customers.
Analysts say that although Chinese firms such as CDGM Glass Company Ltd and Hubei New Huaguang are expanding production of lower-grade optical glass and could make up for supply shortfalls in that area, SLR makers Canon and Nikon will likely continue to source from Japan to avoid compromising quality.
A spokesman for Canon, the world's largest maker of digital cameras, said it was too early to say if it might run short of optical glass. Canon also manufactures its own glass at two plants in Japan, one of which, in Utsunomiya, sustained significant damage in the quake.
"It's not that they will be able to produce nothing at all," said Macquarie Capital Markets analyst Yukihiro Goto. "But there is a question as to whether they will be able to keep up with the remarkable growth in the SLR segment."