The Business Times

Normal production at fire-hit Renesas plant to take 100-120 days

Published Wed, Mar 31, 2021 · 05:50 AM

Tokyo

JAPANESE chipmaker Renesas Electronics said on Tuesday it would take at least 100 days to get back to normal production at its fire-hit plant, even as the government urged some Taiwanese companies to help with alternative chip production.

The company's chip factory in northeast Japan was hit by fire earlier this month due to a power surge in one of the machines, putting more pressure on the broader chips industry amid a global shortage of semiconductors that is hurting production of cars, smartphones and home appliances.

Renesas, which commands nearly a third of the global market share for microcontroller chips used in cars, said 23 machines were damaged in the fire and needed to be replaced or fixed, nearly double its initial estimate of 11.

Renesas CEO Hidetoshi Shibata told a news conference that while production at the plant looked likely to resume within a month, recovery to pre-fire levels was expected to take 100 to 120 days from the incident.

"I'm not too pessimistic about the situation," he said. "I think we won't be too far off from the recovery timing... which is within one month. And our outlook is that the manufacturing capacity will recover as close as 100 per cent."

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He added that any short-term shipment of alternative chip production was impossible and the company would recuperate losses in the six months ending December.

Over the roughly next two months, he said that Renesas will take a related sales hit of between 19.5 billion yen (S$239.5 million) and 26 billion yen.

Renesas shares closed down 0.5 per cent on Tuesday, mostly in line with the broader Japanese market.

Earlier in the day Japan's industry minister Hiroshi Kajiyama said that Japan has asked some Taiwanese manufacturers to cooperate in alternative production of semiconductors.

"We are in communication with several manufacturing equipment makers (in Taiwan) to speed up procurement," Mr Kajiyama told reporters after a Cabinet meeting. "The ministry will also work together for a swift recovery by using all possible means."

The Japanese government has called on equipment makers to help Renesas restore its production, with bureaucrats contacting companies at home and overseas to request they provide parts and machinery to the fire-hit company, a trade ministry official told Reuters on Wednesday. REUTERS

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