TOKYO – Japanese chipmaker Renesas Electronics said Sunday that production could take up to a month to resume at a fire-damaged main plant in Hitachinaka, northeast of Tokyo.
But given the many processes in semiconductor manufacturing, it can take up to three months for supply chains to return to normal.
Renesas’ fire could not have come at a worse time for the automotive industry. The industry has been plagued by a global shortage of semiconductors and has reacted to the winter storm in Texas that cut production at NXP Semiconductors and Infineon Technologies, the world’s no. 1 and 3 player in car discs, knocked out.
Renesas is no. 2. It owns about 20% of the stake in microcontrollers and supplies Toyota Motor and Nissan Motor, among others.
The company’s shares 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 get under control. A production line producing the latest 300mm wafers has been damaged. About two-thirds of the chips produced in the factory are, according to the company, for the automotive industry.
Hidetoshi Shibata, head of Renesas, speaks at an online news conference on March 21 (Photo by Takeshi Hashimoto)
Hidetoshi Shibata, chief executive, told a news conference on Sunday that Renesas would make efforts to resume production within a month. But he acknowledges a “significant” impact on the supply of chips.
“I apologize for the inconvenience and problems caused by this incident,” Shibata said. “We will do everything in our power to reduce the impact, including looking at alternative production,” he said.
But “it is difficult to say whether it is possible to replace production at other factories,” Shibata said.
A separate executive director of Renesas said the company has only about one month’s inventory. An earthquake in February in Fukushima prefecture halted production at the same factory, and stocks were just on the low side.
A representative of a trading house told Nikkei that along with the stock held by distributors, there may be two to three months of chips available. It will be a race against the clock.
“Car manufacturers have almost no inventory themselves,” the dealership representative said. “Once it’s gone, the impact will be felt.”
Renesas stopped production at the plant in Hitachinaka, northeast of Tokyo, after a fire broke out on March 19 that took more than five hours to put out. (Renesas / Kyodo)
The fire damaged 11 machine builders and affected about 5% of the clean room on the first floor of the building, or 600 square meters. A similar beauty room on the second floor remained intact, but the company says it can only resume production once the first floor has been repaired.
Shibata said he feared the fire would have a major impact on the chip supply. About 50 people from car manufacturers and customers came to help replace the damaged machinery, he said.
A car is manufactured from about 30,000 parts. Car manufacturers have consolidated orders from fewer suppliers to save costs, but this has increased the dependence on certain partners, making them vulnerable to such downtime.
A decline in car production could hamper a much-needed recovery of the world economy in general as the world prepares to return from COVID-19.