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Japan Car Makers Scramble to Assess Impact of Renesas Auto Chip-plant Fire

Reuters

   TOKYO - Toyota, Nissan, Honda and other Japanese automakers scrambledon
   Monday to assess the production impact of a fire at aRenesasElectronics
   automotive chip plant that could aggravatea global semiconductor
   shortage.

   "We are gathering information and trying to see if this willaffect us
   or not,"a Hondaspokespersonsaid. Other car makersincluding Toyota and
   Nissan said they too were assessing thesituation.

   The effect on car makers could spread beyond Japan to otherauto
   companies in Europe and the United States because Renesashas around a
   30% global share of micro control unit chips usedin cars.

   Renesas said it will take at least a month to restartproduction on a
   300mm(millimeter)wafer line at its Naka plant in northeastJapan after
   an electrical fault caused machinery to catchfireon Friday and poured
   smoke into the sensitive clean room.

   Two-thirds of production at the affected line is automotivechips. The
   company also has a200mm(millimeter)wafer line at the Nakaplant, which
   has not been affected.

   Concerns on the impact of the fire on production sent autoshares
   sliding in Tokyo on Monday, with the big three, Toyota,Honda and
   Nissan, down more than 2% by the midday break. Renesasshares tumbled as
   much as 5.5% and were down 3.9% midday. Thebenchmark Topix index shed
   1.1%.

   "It willprobably take more than a month to return to normalsupply.
   Given that, even Toyota will face very unstableproduction in April and
   May,"said Seiji Sugiura, senior analystat Tokai Tokyo Research
   Institute."I think Honda, Nissan andother makers will also be facinga
   difficult situation."

   Semiconductors such as those made by Renesas are usedextensively in
   cars, including to monitor engine performance,manage steering or
   automatic windows, and in sensors used inparking and entertainment
   systems.
   An employee wearing protective equipment pushes a cart at a
   semiconductor production facility for Renesas Electronics during a
   government organized tour for journalists in Beijing, May 14, 2020.

   Nissan and Honda had already been forced to scale backproduction plans
   because of the chip shortage resulting fromburgeoning demand from
   consumer electronic makers and anunexpected rebound in car sales from a
   slump during the earlymonths of the coronavirus pandemic.

   Toyota, which ensured parts suppliers had enough stocks ofchips, has
   fared better so far.

   "It could take three months or even half a year for a
   fullrecovery,"said AkiraMinamikawa, analyst at technology
   researchcompanyOmdia."This has happened when chip stockpiles are low,so
   the impact is going to be significant,"he added.

   Government promiseshelp

   Renesas said it customers, which are mostly automotive partsmakers
   rather than the car companies, will begin to see chipshipments fall in
   around a month. The company declined to saywhich machine caught fire
   because of the electrical fault orwhich company made it.

   The Japanese government promised help for the auto industry.

   "We will firmly try to help the Naka factory achieveswift restorationby
   helping it quickly acquirealternative manufacturingequipment,"Chief
   Cabinet SecretaryKatsunobuKatotold a regular news conference on Monday.

   The latest incident at the Naka facility comes after anearthquake last
   month shut down production for three days andforced Renesas to further
   deplete chip stocks to keep up withorders.

   The plant was closed for three months in 2011 following thedeadly
   earthquake that devastated Japan's northeast coast.

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