Damage from a recent fire at a factory in Japan run by chipmaker Renesas was worse than had been thought, according to the company. The damage will worsen the current global semiconductor supply crisis, which is particularly severe in the automotive industry.
The fire broke out at the Naka factory on March 19, causing serious damage to its N3 production line making 300mm semiconductor wafers. The Naka plant was producing chips intended for automotive applications such as engine management. After the fire broke out in the early hours of the morning it was extinguished by firefighters. Nobody was hurt and the building was undamaged but Renesas representatives said at the time there was serious damage to factory equipment and production would be hit.
Initial reports had it that 11 pieces of important machinery had been damaged, but today Renesas issued an updated statement to the media saying that 23 machines had been affected by the fire. It expects to replace 11 of the damaged units during April, but said that some replacements “may not be procured until after June” and that discussions were ongoing with equipment manufacturers. The company revised the financial impact on its operations downwards to JP¥13bn for each month the N3 line remains shut down.
Problems in chip supply have been a very serious issue for automakers for some time now. GlobalData Automotive analysts, in a briefing issued in January, stated that “modern vehicles are as reliant on computer chips as they are on their engines and chassis” and noted that electronic content in modern vehicles is estimated to account for some 30% of the bill of materials, with the prospect of this increasing to 50% by 2030. As a result, automotive production is “as reliant on computer chips as the consumer electronics industry”. Renesas is normally one of the top five chip suppliers to automakers worldwide.
The GlobalData analysis points out that slumping car and truck sales early in the coronavirus pandemic led automakers to cut chip orders. Booming demand for IT and computing equipment of every type also led chipmakers to reassign manufacturing capacity away from automotive equipment. Recovering auto sales have left car makers scrambling for semiconductor supplies.
On top of all this, severe February weather in Texas hit Samsung factories there, further worsening the problem. Ford of the US has even gone so far as to say it will produce its iconic F-150 pickup trucks without some of their usual chips for a time, possibly adding them later.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
The news that the Renesas fire caused more damage than had been thought seems likely to worsen the gloom across the automotive sector.