But given the many semiconductor manufacturing processes, it may take more than three months for supply chains to return to normal.
The Renesas fire couldn’t come at a worse time for the auto industry. Already hit by a global semiconductor shortage, the industry was scrambling to respond to the Texas winter storm that shut down production of NXP Semiconductors and Infineon Technologies, the world’s No. 1 and No. 3 in automotive chips. .
Renesas is No. 2. It controls around 20% of the world’s shares in microcontrollers and supplies companies such as Toyota Motor and Nissan Motor.
The company’s shares fell nearly 5% in Tokyo on Monday morning.
The fire broke out at 2:47 a.m. on Friday and took more than five hours to get under control. A production line that produces the last 300mm inserts was damaged. About two-thirds of the chips produced at the plant are destined for the auto industry, according to the company.
CEO Hidetoshi Shibata told a press conference on Sunday that Renesas would make efforts to resume production “in a month”. But he recognized a “significant” impact on the chip supply.
“I apologize for the inconvenience and problems caused by this incident,” said Shibata. “We will do everything possible to minimize the impact, including by considering alternative production,” he said.
But “it is difficult to say whether it is possible to replace production in other factories,” said Shibata.
Another Renesas executive said the company only has about a month of inventory. An earthquake in February in Fukushima Prefecture halted production at the same factory, and stocks were just at the bottom of the scale.
A representative for a trading house told Nikkei that, combined with inventory held by distributors, there could be two to three months of chips available. It will be a race against time.
“Automakers have virtually no inventory,” said the representative of the trading house. “Once it’s gone, the impact will be felt. ”
The fire damaged 11 chip-making machines and affected around 5% of the clean room on the first floor of the building, or 600 m². A similar clean room on the second floor has remained intact, but the company says it will only be able to resume production after the first floor has been repaired.
Shibata said he was concerned the fire would have a significant impact on the supply of fleas. About 50 people from automakers and customers came to help, replacing damaged machines, he said.
A car is made up of around 30,000 parts. Automakers have consolidated orders with fewer suppliers to cut costs, but this has increased reliance on some partners, making them vulnerable to such disruptions.
A slowdown in auto production may hamper a much needed recovery in the global economy in general as the world prepares to rebound from COVID-19.