Connect with us

Hi, what are you looking for?

Economy

Japan carmakers scramble to assess impact of Renesas auto chip-plant fire

TOKYO — Toyota, Nissan, Honda, and other Japanese automakers scrambled on Monday to assess the production impact of a fire at a Renesas Electronics automotive chip plant that could aggravate a global semiconductor shortage.

“We are gathering information and trying to see if this will affect us or not,” a Honda spokesman said. Other carmakers including Toyota and Nissan said they too were assessing the situation.

The effect on car makers could spread beyond Japan to other auto companies in Europe and the United States because Renesas has around a 30% global share of micro control unit chips used in cars.

Renesas said it will take at least a month to restart production on a 300mm wafer line at its Naka plant in northeast Japan after an electrical fault caused machinery to catch fire on Friday and poured smoke into the sensitive clean room.

Two-thirds of production at the affected line is automotive chips. The company also has a 200mm wafer line at the Naka plant, which has not been affected.

Concerns on the impact of the fire on production sent auto shares sliding in Tokyo on Monday, with the big three, Toyota, Honda, and Nissan, down more than 2% by the midday break. Renesas shares tumbled as much as 5.5% and were down 3.9% midday. The benchmark Topix index shed 1.1%.

“It will probably take more than a month to return to normal supply. Given that, even Toyota will face very unstable production in April and May,” said Seiji Sugiura, senior analyst at Tokai Tokyo Research Institute. “I think Honda, Nissan, and other makers will also be facing a difficult situation.”

Semiconductors such as those made by Renesas are used extensively in cars, including to monitor engine performance, manage steering or automatic windows, and in sensors used in parking and entertainment systems.

Nissan and Honda had already been forced to scale back production plans because of the chip shortage resulting from burgeoning demand from consumer electronic makers and an unexpected rebound in car sales from a slump during the early months of the coronavirus pandemic.

Toyota, which ensured parts suppliers had enough stocks of chips, has fared better so far.

“It could take three months or even half a year for a full recovery,” said Akira Minamikawa, analyst at technology research company Omdia. “This has happened when chip stockpiles are low, so the impact is going to be significant,” he added.

GOV’T PROMISES HELP
Renesas said its customers, which are mostly automotive parts makers rather than the car companies, will begin to see chip shipments fall in around a month. The company declined to say which machine caught fire because of the electrical fault or which company made it.

The Japanese government promised help for the auto industry.

“We will firmly try to help the Naka factory achieve swift restoration by helping it quickly acquire alternative manufacturing equipment,” Chief Cabinet Secretary Katsunobu Kato told a regular news conference on Monday.

The latest incident at the Naka facility comes after an earthquake last month shut down production for three days and forced Renesas to further deplete chip stocks to keep up with orders.

The plant was closed for three months in 2011 following the deadly earthquake that devastated Japan’s northeast coast. — Reuters

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

The goal for most businesses is to grow, so the concept of bad growth may seem counterintuitive to a lot of business owners. However,...

Investing

Employees of all companies will be able to request flexible working arrangements when they start new jobs under proposals to be published by ministers....

Investing

Our perspectives on remote working have changed dramatically over the course of the pandemic. No doubt many employers in 2019 would have assumed that...

Economy

The Bangko Sentral ng Pilipinas (BSP) lowered the country’s balance of payments (BoP) surplus projection for this year, reflecting the lower current account surplus and the risks...

Economy

The Securities and Exchange Commission (SEC) is encouraging more companies to tap the capital markets, in hopes that there would be over 800 companies listed at...

Economy

Outsourcing firms operating in economic zones are allowed to implement remote work arrangements until March 2022 as the pandemic continues, the Finance department said...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

US President Joseph R. Biden, Jr., will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!