Renesas warns global chip supply hits factory after fire

Renesas Electronics, one of the largest manufacturers of chips in the world for the automotive industry, has warned that a fire at one of its factories could have a major impact on global semiconductor supplies and could halt production for at least a month.

The timing of Friday’s fire in Japan’s advanced chip plant could not be worse for carmakers, who have been grappling with the widespread disruption of supply chains caused by the Covid-19 pandemic, as well as the U.S. cold that led to mass killings in Texas. .

“We are concerned that there will be a huge impact on the chip supply,” Renesas CEO Hidetoshi Shibata told an online news conference on Sunday. “We will use every possible means to limit the impact.”

The fire broke out in one of the clean rooms at the factory in the city of Naka, north of Tokyo, which stopped production of 300 mm wafers and burned about 2 percent of the facility’s manufacturing equipment.

About two-thirds of the production affected was, according to the Shibata car chips. If the facility stays offline for a month, Renesas will lose $ 17 billion ($ 156 million) in revenue. The financial hit is not expected to affect the group’s plan to buy Apple supplier Dialog for € 4.9 billion.

Both Renesas and its automotive customers, including Toyota and Nissan, took steps to diversify their supply chains following the 2011 earthquake and tsunami in Tohoku, when car factories worldwide came to a standstill after the production of Renesas microcontrollers was hit.

Partly as a result of these efforts, about two-thirds of the chips affected during the latest fire could be produced elsewhere. But Shibata acknowledged that it would be difficult to find alternative facilities to make its chips, as the industry is already struggling with a lack of free production capacity at foundries such as Taiwan’s TSMC, the world’s largest contract disc maker.

Renesas increased production to address the shortage of semiconductors, and moved some of the chips outsourced to TSMC to the fire line damaged by the fire. The Taiwanese company has struggled to anticipate an increase in demand, after a surge in car sales coincided with a rising consumer electronics market.

The shortage of chips has already slowed down global car production and threatens to slow down the production of other forms of electronics, including smartphones.

The drought in semiconductor parts is exacerbated by extreme weather in the US, which has led to a shortage of petrochemicals used in seats, airbags and dashboards.

Toyota, one of Renesas’ biggest customers, said on Friday that its plant in the Czech Republic would close for two weeks due to disruption of the North American supply chain due to the cold in Europe.