TOKYO (Reuters) – Toyota, Nissan, Honda and other Japanese carmakers were on Monday assessing the manufacturing impact of a fire at a Renesas Electronics auto chip factory that could exacerbate a global semiconductor shortage.
“We are collecting information and trying to see whether it affects us or not,” said a Honda spokesperson. Other automakers, including Toyota and Nissan, said they too were assessing the situation.
The effect on car manufacturers could spread beyond Japan to other car companies in Europe and the United States, as Renesas has about 30% of the microcontroller chips used in cars worldwide.
Renesas said it will take at least a month to restart production on a 300mm waffle line at the Naka factory in northeastern Japan after an electrical outage caused machines to catch fire on Friday and pour smoke into the sensitive cleanroom. .
Two-thirds of the production on the line concerned is automotive chips. The company also has a 200mm waffle line at its Naka plant that has not been affected.
Concerns about the fire’s impact on production caused auto shares to shift, with the big three, Toyota, Honda and Nissan, closing more than 3.3%. The Renesas share plummeted a whopping 5.5% and ended up 4.9% lower. The benchmark Topix index lost almost 1%.
“It will probably take more than a month for supplies to return to normal. Considering 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 manufacturers will also face a difficult situation.”
Semiconductors such as Renesas’ are widely used in automobiles, including to monitor engine performance, control or manage automatic windows, and in sensors used in parking and entertainment systems.
Nissan and Honda have already been forced to scale back their production plans due to chip shortages due to growing demand from consumer electronics manufacturers and an unexpected rebound in car sales following a slump during the early months of the coronavirus pandemic.
Toyota, which made sure parts suppliers had enough chips, has done better so far.
“It can take three months or even half a year to fully recover,” said Akira Minamikawa, an analyst at technology research firm Omdia. “This has happened when chip stocks are low, so the impact will be significant,” he added.
GOVT PROMISES HELP
Renesas said its customers, who are usually auto parts manufacturers rather than auto companies, will see chip shipments decline in about a month. The company declined to say which machine caught fire due to the electrical failure or which company made it.
The Japanese government pledged aid to the auto industry.
“We will resolutely try to help the Naka plant in its rapid restoration by helping it quickly procure alternative production equipment,” Cabinet secretary Katsunobu Kato told a regular news conference Monday.
The latest incident at the Naka facility comes after an earthquake last month, which shut down production for three days and forced Renesas to further deplete chip supplies to keep up with orders.
The plant was closed for three months in 2011 after the deadly earthquake that devastated Japan’s northeast coast.
Reporting by Maki Shiraki, Eimi Yamamitsu and Noriyuki Hirata; Writing by Tim Kelly; Editing by Muralikumar Anantharaman