Fire At Chip Plant Causing Concerns

Issue 63

The Japanese chip manufacturer, Renesas Electronics, announced recently that production may take up to a month to resume after a fire destroyed a main factory in Hitachinaka, northeast of Tokyo, and considering the many processes in semiconductor fabrication, it could possibly take up to, if not over, three months for supply chains return to normal.

The fire could not come at a more inopportune time for the auto industry. Already battered by a global shortage of semiconductors, the industry had been scrambling to respond to the Texas winter storm that knocked out production at NXP Semiconductors and Infineon Technologies, two of the world’s leading chipmakers.

Renesas is also one of the world’s leading chipmakers and controls about a 20% global share in microcontrollers and other needed technologies that auto manufacturers use like Toyota, Honda and Nissan. Renesas’ shares fell almost 5% in Tokyo on Monday morning, along with the shares of Japanese automakers.

The fire broke out at 2:47 a.m. on Friday and took more than five hours to bring under control. A production line that produces the latest 300 mm wafers was severely damaged, and over half of the chips produced at the plant are for the auto industry alone, according to the company.

Source: Financial Times