Renesas fire threatens to deepen global chip supply woes
25 March, 2021
Japan's federal government and automakers happen to be lining up to provide support to an integral chip manufacturer following a factory fire that could worsen a worldwide semiconductor shortage plaguing car firms.
The blaze at among Renesas's plants the other day comes at the worst possible time for the auto sector, which is already battling supply problems in part due to increased demand for chips from companies of laptops, tablets and gaming equipment.
"Amid global problems over a semiconductor shortage, there may be a substantial affect," wrote UBS Securities Japan analysts Kenji Yasui and Sean Recreation area in an email after the fire.
Renesas controls about 35 percent of the marketplace for motor vehicle semiconductors and company president Hidetoshi Shibata warned this weekend of a "incredibly big" impact on global chip supply.
Now Japan's government plus some of Renesas's have customers, including top-selling Toyota, are offering help, in an indicator of the deep concern due to the fire granted the prevailing supply problems.
"It is crucial to aid the company's initiatives to recuperate from the fire as it could have monetary and social impacts found in Japan," said Kazumi Nishikawa, the official responsible for the tech sector at Japan's ministry of market, trade and industry.
Government support isn't more likely to include financial assistance, but could involve coordinating support from the exclusive sector or helping Renesas procure replacement products.
"What is important now is to prepare a host where Japanese industry as a whole will cooperate for a quick recovery," he told AFP Wednesday.
Toyota confirmed it all had sent several personnel to "investigate the problem" at the plant in northeastern Ibaraki prefecture, but gave no more details.
The March 19 fire burned through 600 sq . metres of a product making 300mm wafers, and Renesas says it expectations to revive operations within per month.
But Satoru Takada, a car analyst at Tokyo-based exploration and consulting firm TIW, said development was unlikely to be back again to normal quickly.
"Renesas said it could recover in per month, but it might not be capable of geting back to full capacity straight away. The affect could drag on," he told AFP.
Some studies have said it might take closer to three months to restore capacity, and Takada said automakers have to "consider ways to reduce supply shortage risks that affect their complete production".
Automakers in Japan and abroad have already been circumspect about the impact.
Companies including France's Renault, Germany's Volkswagen and Hyundai found in South Korea told AFP they might take action as essential to deal with any extra shortages, but declined to give details.
In Japan, Honda, Nissan and Toyota all said they were even now studying the impact of the fire.
Analysts said further chip shortages were unavoidable, especially given earlier hits including a good halt in production found in Texas during recent cold weather.
Experts at Moody's Investors Service were already caution earlier this season of a good "bottleneck" lasting "for the next two to three quarters until semiconductor source and stock amounts have normalised".
"The incident increases the existing source chain disruptions that the auto industry features been experiencing lately," wrote Mariko Semetko, VP-senior credit rating officer at Moody's Japan, in a note after the Renesas fire.
But there are expectations that the long-term effects could possibly be limited by work that were previously underway by automakers to diversify their suppliers, and by suppliers to improve semiconductor production.
"Although the fire really cannot have come at a worse time, its effect should prove manageable and one-off," explained Amir Anvarzadeh, a strategist in Asymmetric Advisors.
Long run, Renesas is well located to get back on its feet quickly, he added.
"Once you have your very own customers sending help repair the facility harm and carry production back online ASAP, you know you have a good business."
Source: japantoday.com
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