TOKYO – Japanese chip maker Renesas Electronics said on Sunday that production could take up to a month to resume at a major fire-damaged factory in Hitachinaka, northeastern Tokyo.
But given the numerous semiconductor manufacturing processes, it can take more than three months for supply chains to return to normal.
The Renesas fire could not have come at a worse time for the auto industry. The industry, already hit by the global shortage of semiconductors, had struggled to respond to Texas ’winter storm that ended production of NXP Semiconductors and Infineon Technologies, the world’s No. 1 and No. 3 players in chip chips. ‘automotive.
Renesas is number 2. It controls about 20% of the global share of microcontrollers and supplies similar products to Toyota Motor and Nissan Motor.
Shares of the company fell nearly 5% in Tokyo on Monday morning.
The fire broke out Friday at 2:47 a.m. and took more than five hours to control. A production line that produces the last 300 mm wafers was damaged. According to the company, approximately two-thirds of the chips produced at the plant are destined for the automotive industry.
Renesas chief Hidetoshi Shibata speaks at an online press conference on March 21 (Photo by Takeshi Hashimoto)
CEO Hidetoshi Shibata told a news conference on Sunday that Renesas will make efforts to resume production “within a month”. But he acknowledged a “significant” impact on the supply of tokens.
“I apologize for the inconvenience and problems caused by this incident,” Shibata said. “We will make every effort to minimize the impact, including the search for alternative production,” he said.
But “it’s hard to say if it’s possible to replace production in other factories,” Shibata said.
A separate Renesas executive said the company only has a one-month inventory. A February earthquake in Fukushima prefecture had halted production at the same plant, and reserves were at an end.
A representative of a trading house told Nikkei that along with distributors ’inventories, there may be two or three months of chips available. It will be a race against the clock.
“Car manufacturers have almost no inventories of their own,” the representative of the trading house said. “Once finished, the impact will be felt.”
Renesas stopped production at the Hitachinaka plant in northeastern Tokyo after a March 19 fire that took more than five hours to extinguish. (Reneses / Kyodo)
The fire damaged 11 chip-making machines and affected about 5% of the clean room on the first floor of the building, which is 600 square meters. A clean room similar to the second floor remained intact, but the company says it can only resume production once the first floor has been repaired.
Shibata said he fears the fire will have a big impact on the supply of chips. He said about 50 people from car manufacturers and customers have attended to replace the damaged machinery.
A car is made with about 30,000 pieces. Car manufacturers have been consolidating orders from fewer suppliers in order to reduce costs, but this has increased dependence on certain partners, making them vulnerable to stops like these.
A slowdown in car production may hamper the much-needed recovery of the global economy as a whole as the world prepares to recover from COVID-19.