Renesas Chip-Plant Fireplace Spreads Issues About International Auto Manufacturing

TOKYO—A hearth at a manufacturing unit of one of many world’s main auto chip makers has added to the troubles of automotive makers that have already got slashed manufacturing due to a semiconductor scarcity.

The hearth Friday left a swath of charred tools within the manufacturing unit owned by a subsidiary of

Renesas Electronics Corp.


RNECY -2.99%

in Hitachinaka, northeast of Tokyo. The corporate stated it will take no less than a month to restart the broken operations.

Shares of Japan’s three main automotive makers—

Toyota Motor Corp.


TM -2.70%

,

Nissan Motor Co.


NSANY 3.68%

and

Honda Motor Co.


HMC -3.28%

—all fell by greater than 3% on Monday, worse than the general market, whereas Renesas shares have been down 4.9%.

The corporate stated an influence surge brought on the hearth.



Photograph:

Renesas Electronics Corp.

Renesas stated an influence surge brought on the hearth and contaminated clear rooms wanted to make semiconductors. It stated two-thirds of the affected manufacturing traces have been making automotive chips.

Renesas’s chief govt,

Hidetoshi Shibata,

stated Sunday the impression on international chip provides can be vital.

Mariko Semetko,

a credit score analyst at Moody’s Japan, stated the hearth was more likely to damp the restoration of world auto manufacturing this yr, whereas auto makers stated they have been nonetheless assessing the impression.

Mr. Shibata stated the corporate was making an attempt to make up for the misplaced manufacturing at different crops however didn’t know whether or not that was potential. The corporate estimated the income losses on the equal of $160 million a month.

Automobile makers have already been fighting a scarcity of semiconductors stemming partly from an unexpectedly sturdy comeback after the coronavirus pandemic hit final yr. That left factories ill-prepared to extend manufacturing rapidly.

Ford Motor Co.


F -0.58%

stated in February it anticipated to chop output by as much as 20% within the first quarter of this yr, costing the corporate $1 billion to $2.5 billion in pretax revenue.

Issues at Renesas have been already contributing to the semiconductor bottlenecks. An earthquake in February halted the Hitachinaka manufacturing unit for a number of days, trimming stock. Renesas’s govt vp,

Masahiko Nozaki,

stated the corporate had stock to keep up shipments for under a month.

The earthquake and hearth carried a sense of déjà vu for Renesas, as a result of the identical manufacturing unit was one of many hardest-hit by japanese Japan’s devastating earthquake on March 11, 2011. It was offline for about three months and mobilized 1000’s of individuals together with clients’ staff to make repairs.

The manufacturing unit took on a much bigger function not too long ago throughout the chip scarcity. Renesas stated earlier this month it had introduced again to Japan some manufacturing initially outsourced to

Taiwan Semiconductor Manufacturing Co.


TSM 2.52%

, in a bid to fulfill buyer demand extra rapidly. The hearth will delay a part of that manufacturing, Renesas stated.

Write to Yang Jie at [email protected]

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