Automotive semiconductors are in short supply

A fire broke out at a plant of Japanese semiconductor manufacturer Renesas Electronics headquartered in Tokyo, halting production. The accident may exacerbate a global shortage of automotive semiconductors as it is expected to take more than a month to resume production.

Japanese newspapers including The Nikkei reported that a fire broke out at a Renesas plant in Naka, Ibaraki Prefecture in the early morning of Friday, bringing production to a stop. The building is where 300 mm wafers and automotive micro-controllers are produced.

The world’s third largest automotive chipmaker said on Sunday that 11 pieces of equipment have been damaged and automotive semiconductors take up two thirds of the production at the facility. “While there was no damage to the building, we confirmed damages to some of the utility equipment,” the company said in a statement, adding that it would resume production after about a month. A semiconductor production line usually takes several months to be restored completely after it comes to a full stop.

The semiconductor industry worries that global automakers would face an even more severe shortage of automotive semiconductors following the accident. Renesas makes up approximately 20 percent in the micro-controller market in the world. Bloomberg said main customers of the company such as Toyota Motor, which stopped some of its production lines due to a shortage of automotive semiconductors, will take a blow from the fire. Customers of Renesas include Ford, Apple and Volkswagen.

The current global shortage has been triggered as demand for cars soared unexpectedly. Automakers slowed production and reduced inventory in the wake of the prolonged COVID-19 pandemic, while automotive semiconductor makers focused on delivering orders for smartphones, computers and servers, which created a gap between demand and supply. The shortage was further intensified after a cold spell in Texas, the United States and the recent fire at the semiconductor plant in Japan.


Dong-Il Seo dong@donga.com