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Renesas fire to cut global car production by 7%
The fire that took place on March 19 at one of the largest enterprises of Renesas Electronics in Japan, according to industry analysts, will cost the global auto industry a decrease in production volumes by 1.6 million cars in the second quarter, which corresponds to a 7% decrease from the planned volume. The effects can be felt even six months after the fire.
Image source: Renesas Electronics
The Nikkei Asian Review specifies that the company does not expect to return to normal operations until mid-July. Some of the damaged equipment will be replaced in April, but some equipment will be restored no earlier than June. The air in clean rooms after a fire is saturated with chlorine and soot, it is these particles that have caused the failure of equipment that is not directly affected by combustion. Renesas estimates that the elimination of the consequences of the fire, which will last at least four months, will entail losses in the amount of $ 158 to $ 218 million.
The company expects to make up for lost time no earlier than the second half of the year, but even in this case, it will have to involve third-party contractors such as TSMC to increase production volumes against the background of a general shortage. Prior to the fire, a facility in Ibaraki prefecture was operating at 90 percent utilization. Renesas is the second largest manufacturer of specialized electronics in the world, controlling 20% of the segment, customers not only in Japan, but also in Europe and the USA will be affected by fire.
Japanese automakers have already estimated the extent of the damage. Toyota Motor said that stocks of chips will last until June, and in the future, car production will inevitably have to be reduced. Honda Motor expects to face problems by the end of April. Nissan Motor recognizes that the impact of the fire at Renesas also cannot be avoided, but it timidly expects to compensate for the negative effect by increasing vehicle production in the fall and early next year. Industry analysts believe the impact of the fire will be felt for at least six months. The auto industry in Japan accounts for 18% of exports and 15% of the total volume of industrial production, this industry is very important for the country’s economy.