Japanese chipmaker Renesas to reopen Beijing plant

RENESAS Electronics said it will restart work on Tuesday (Dec 20) at its Beijing chip plant that was closed because of Covid-19 infections, ending one of the first suspensions by a major foreign manufacturer.

Renesas, the world’s leading maker of automobile chips, said on Monday it was making up for the lost output with existing stock and did not expect much of an impact from the stoppage. The plant, which halted output on Friday, mostly produces semiconductors used in industrial machinery and home appliances, a spokesperson said.

Still, the suspension serves as a high-profile sign of the potential knock-on economic effect for foreign manufacturers in China from the worsening Covid crisis. The recent surge in Covid cases in China has hit major urban centres and is sweeping through trading floors in Beijing and spreading fast in the financial hub of Shanghai.

China’s broad relaxation of strict Covid containment measures this month triggered the still-growing wave of infections. Health experts say China may now pay a price for shielding a population that lacks natural immunity and has low vaccination rates among the elderly.

Renesas, which makes around a third of all the microcontroller chips used by the world’s carmakers, is one of many big Japanese manufacturers to have operations in China. It also has a plant in the eastern city of Suzhou.

Any disruption in China could also be troublesome for Japan’s automakers, given their large manufacturing presence there.

“Parts shortages continue due to the spread of Covid-19, and some factories in China are adjusting production,” a Toyota Motor spokesperson said.

Nissan Motor did not immediately respond to a request for comment about its operations. REUTERS