Major auto chip supplier Renesas says it expects to resume production in a month following a fire at its factory

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  • Renesas will replace equipment damaged by Friday’s fire.
  • The fire will likely further dent the global supply of chips needed by auto makers, CEO Hidetoshi Shibata said.
  • Halting production at the building will cost around $156 million per month, the company said.
  • See more stories on Insider’s business page.

Japan’s Renesas Electronics, a leading supplier of semiconductors for the automotive industry, will resume production within one month at its N3 Building where a fire broke out last week, the company said on Sunday.

The blaze broke out Friday in a clean room at the company’s main factory in Hitachinaka, northeast of Tokyo. Halting production at the N3 Building will cost around 17 billion yen (or around $156 million) per month, the company said.

The production halt is also likely to further dent the global supply of chips needed by auto makers, CEO Hidetoshi Shibata said.

The clean room will be scoured and the company will procure replacements of the burned equipment, company officials said in a Sunday press conference.

Renesas reported no damage to the building or injures among employees but said that 2% of the manufacturing equipment at the N3 Building has been burned.

The company said that around two-thirds of the products manufactured at the N3 Building can be produced in foundries as an alternative.

Manufacturers in the electronics and auto industry have been struggling with the global chip shortage caused by disruptions in the supply chain during the coronavirus pandemic. This has pushed companies to delay production plans or search for other suppliers.

In February, the Japanese chipmaker bought Dialog Semiconductor, an Apple chip supplier, for 4.9 billion euros ($5.9 billion) in cash.

https://markets.businessinsider.com/news/stocks/auto-chip-supplier-renesas-resume-production-month-semiconductor-2021-3-1030230185

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