Renesas Electronics, one of the world’s largest chip makers for the automotive industry, warned that a fire at one of its factories could “have a massive impact” on the global supply of semiconductors and disrupt production for at least a month.
The timing of Friday’s fire at the installation of advanced chips in Japan could not be worse for automakers, which were already struggling with the widespread disruption of supply chains caused by the Covid-19 pandemic, as well as the US cold spell. that led to massive blackouts in Texas.
“We are concerned that there will be a major impact on the supply of chips,” said Hidetoshi Shibata, chief executive of Renesas, at an online news conference on Sunday. “We will look for all possible means to minimize the impact.”
The fire started in one of the company’s clean rooms in the city of Naka, north of Tokyo, interrupting the production of 300 mm wafers and burning about 2 percent of the factory’s manufacturing equipment.
About two-thirds of the affected output was from automotive chips, according to Shibata. If the facility remains offline for a month, he added, Renesas will lose about ¥ 17 billion ($ 156 million) in revenue. The financial blow is not expected to have any impact on the group’s plan to buy Dialog, an Apple supplier, for € 4.9 billion.
Both Renesas and its automotive customers, including Toyota and Nissan, took steps to diversify their supply chains after the Tohoku earthquake and tsunami in 2011, when auto factories around the world 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 in the last fire may be produced elsewhere. But Shibata acknowledged that finding alternative facilities to make his chips would be difficult, as the industry is already struggling with a lack of spare production capacity in foundries like Taiwanese TSMC, the world’s largest contracted chip maker.
Renesas was increasing production to address the semiconductor shortages by transferring some of the outsourced chips to TSMC to the manufacturing line that was damaged by the fire. The Taiwanese company has been struggling to meet an increase in demand after a rebound in car sales coincided with a booming consumer electronics market.
The chip shortage has already slowed automotive production worldwide and threatens to delay the production of other forms of electronics, including smartphones.
The drought in semiconductor parts was exacerbated by the extreme weather in the USA, which triggered a shortage of petrochemicals that are used in seats, airbags and panels.
Toyota, one of Renesas’ biggest customers, said on Friday that it would close its plant in the Czech Republic for two weeks, as the disruption to its North American supply chain caused by the cold has spread across Europe.
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