TOKYO — Japanese chipmaker Renesas Electronics expects a fire-damaged semiconductor plant to take up to four months to fully recover, leaving some of the country’s biggest carmakers concerned over dwindling supplies of key components.
“It is expected to take a little more than 100 days before full-capacity production is restored,” Hidetoshi Shibata, Renesas’ president and CEO, told an online briefing with journalists and analysts on Tuesday.
Renesas is the world’s second largest manufacturer of automotive chips after NXP Semiconductors and the key supplier to Toyota Motor and Nissan Motor. Any production halt for carmakers would have a major impact on the Japanese economy, with autos accounting for about 18% of exports and 15% of manufacturing output.
The fire broke out on the first floor of Renesas’s factory in Hitachinaka, Ibaraki Prefecture, north of Tokyo, on March 19. It damaged 23 machines used in chip production, Shibata said on Tuesday.
Shibata said that he was now “more certain” that production could resume in a month’s time, as he had previously indicated on March 21.
But he acknowledged that there would be a supply shortfall for a month or two, once Renesas exhausts its current stocks of semi-finished products at the factory. Those stocks are expected to run out within a month of the restart of production, while it takes 120 days to make a chip from scratch.
“We will do our best to make the gap as short as possible,” Shibata said.
The Naka fire comes on top of other incidents that have hit global supplies of automaking chips. Wholesalers are believed have chip stocks to support two to three months of auto production.
Scaffolding is seen in the factory, showing Renesas’ recovery work after the fire. (Screenshot from Renesas’ website) During Tuesday’s presentation Shibata showed an image of a factory floor where scaffolding is seen standing alongside chip-making equipment. Shibata said that work to reinforce the ceiling beams and other structures of the building is now complete and debris has been removed.
The fire broke out on the first floor of the Naka plant, while leaving the second floor intact. Wiring work takes place on the first floor, while on the second floor, transistors are attached.
Products move back and forth between the first and second floors during the production, making it impossible to resume output without repairing the first floor.
The fire burned 11 of the some 390 machines on the first floor. After close inspection, it has been found out that 12 others also need some kind of repair. Those machines have been contaminated with soot and chlorine produced by the fire.
The company is scrambling to examine whether the semi-finished products are still usable. The cleanroom for production is being cleaned to make sure the air will be free of chloride and other chemicals.
Most of the 23 damaged machines will be replaced in April and May. However some will have to be made from scratch and will not be installed until June.
Renesas is going to make up for lost output by using other Renesas plants and other manufacturers. Shibata said he expects the lost output will be made up for in the third and fourth quarter.
Renesas has nearly 20% of the global market for microcomputers, which control cars and other machines.
The factory was operating at more than 90% of its capacity at the time of the fire, said Masahiko Nozaki, production chief. Renesas has said an electricity overload was the cause of the fire, prompting speculation that the company may have been overworking the factory in order to respond to the global semiconductor shortage. Nozaki said, however, that the ultimate cause of the fire remains under investigation.
The global chip shortage has been caused in part by a surge in demand for computers and servers, as more people work from home and use cloud services during the pandemic. The situation has been exacerbated by a Texas winter storm, which knocked out chip production in the U.S.