AUTOMOTIVE INDUSTRY Fire at Renesas: chip production to be resumed

The chip shortage has already been causing concern in the automotive industry for months. These were further exacerbated by the fire at the Japanese chip factory Renesas. But the date for the resumption of production provides a ray of hope.

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The global chip shortage observed since the beginning of the year threatens the automotive industry and has already led to a temporary shutdown at some car manufacturers. Demand for chips continues to significantly outstrip supply - a costly issue that was further fueled by the March 19 fire at Renesas Semiconductor Manufacturing Co., Ltd's Naka Factory in Japan. Because the company operates in the global market and is a leading supplier of semiconductors for the automotive industry, the fire not only made waves locally, but caused a worldwide stir.

Fire not without consequences

The fire did not cause any injuries and was extinguished on the same day. Nevertheless, production in the affected building had to be stopped temporarily, as damages to some of the utility equipment such as the pure water supply and the air conditioning as well as to some of the manufacturing equipment were detected. The cause of the fire was apparently the Cu plating equipment, which has a low thermal resistance and ignited due to an overcurrent. It was initially impossible to predict when production would resume, but in a later update from Renesas, it was announced that production should resume within a month. One of the biggest challenges was to re-procure the 23 manufacturing units damaged by the fire. On April 17, it was announced that production had resumed at 10 % and was expected to increase to 50 % by the end of April, with full production capacity to be reached by the end of May.

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Chip shortage has severe impact on automotive sector

Due to the ongoing supply shortages, Daimler has put thousands of employees back on short-time work at at least two sites in Germany for the time being. Previously, VW had also announced to have sent thousands of employees in a German plant into short-time work. Automaker Ford had announced that it would halt production completely by May 18. It is predicted that the chip shortage will continue until the end of the year and may even stretch into January 2022.

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