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


Toyota, Nissan, Honda, and other Japanese automakers scrambled on Monday to evaluate the manufacturing impact of a fire at a Renesas Electronics automotive chip plant that might accelerate the global semiconductor shortage.

We are collecting information and trying to see if this would have any effect on us or not, a Honda spokesman stated. Other carmakers which included Toyota and Nissan announced that they too were assessing the situation.

The effect on car makers might spread past Japan to other auto companies in Europe and the United States since the Renesas has nearly 30% global share of micro control unit chips which are used in cars.

Renesas stated that it would need at least a month to start the production again on a 300mm wafer line at its Naka plant in northeast Japan after due to an electrical fault made the machinery to catch fire on Friday and poured smoke into the sensitive cleanroom.

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

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

Seiji Sugiura who is a senior analyst at Tokai Tokyo Research Institute told that it might probably take more than a month to return back to normal supply. Given that, even Toyota would encounter an unstable production in April and May, he assumes Honda, Nissan and other makers would also be facing this challenging situation.

Semiconductors such as those created by Renesas are used broadly in cars, which included monitoring engine performance, manage steering or automatic windows, and sensors utilized in parking and entertainment systems.

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

Toyota, which made sure that parts suppliers had sufficient stocks of chips, has fared better so far.

Akira Minamikawa is an analyst at the technology research company Omdia, who stated that it would take three months or also half a year for a complete recovery, this has taken place when chip stockpiles are low, so the impact is going to be significant, he added.

Renesas told its customers, which are mostly automotive parts makers rather than car companies, would see chip shipments drop in around a month. The company refused to address which machine had caught fire due to the electrical fault or which company made it.

The Japanese government promised to help the auto industry.

We would strongly try to help the Naka factory to obtain swift restoration by helping it quickly get the substitutional manufacturing equipment, Chief Cabinet Secretary Katsunobu Kato addressed a regular news conference on Monday.

The recent incident at the Naka facility follows after an earthquake last month ceased production for up to three days and forced Renesas to deplete chip stocks to keep up with orders.

The plant was shut down for three months in 2011 after the deadly earthquake that destroyed Japan’s northeast coast.

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