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Japanese auto chipmaker Renesas expects to resume full production next month following fab blaze

Glimmer of hope on the semiconductor front – for the car industry anyway

Japanese chipmaker Renesas has said it will restore full production capacity at its N3 Naka plant by the middle of next month following a blaze in March that destroyed equipment and contaminated the clean room.

Renesas, which accounts for a third of all automotive semiconductor sales globally, said it expects to be at half-capacity by the end of April. CEO Hidetoshi Shibata confirmed in a press conference the company plans to install new fire suppression equipment to prevent any future fires.

Operations at the Naka N3 clean room resumed on 9 April. According to a notice from Renesas, the company had to rely on over 1,600 workers each day (both internal and from third parties) to rebuild and decontaminate the clean room, illustrating both the scale of destruction and difficulty in restoration.

The fire, which was likely caused by an electrical overload in plating machinery, destroyed 17 fabrication machines and damaged the facility's ultra-pure water and air conditioning infrastructure.

News of the recovery should prove welcome to the chip-starved automotive sector, which has been forced to slash production in the face of an industry-wide semiconductor shortage. Analysts have said this shortfall is liable to cost carmakers $60.6bn in lost revenue during 2021.

Renesas isn't the sole chipmaker having difficulties this year. In February, NXP (another major producer of automotive semiconductors) was forced to briefly suspend production at its Texas facilities following state-wide blackouts. Additionally, the sector is bracing for disruption in Taiwan, where a long-running drought is set to starve the island nation's foundries of essential water supplies.

The disruption on the production side has been compounded by several missteps by automotive manufacturers, which failed to correctly predict the resurgence in consumer demand for new cars by the end of last year.

As carmakers expected consumer demand to remain depressed for some time, they slashed orders with chip suppliers, with capacity swallowed up by other less affected sectors. Due to their overreliance on just-in-time supply chains, carmakers simply didn't have enough inventory to ramp up production.

Analysts and industry figures expect the shortage to last into 2022, and possibly beyond, according to Intel chief Pat Gelsinger. ®


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