Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Factory blaze adds to computer chip supply crisis

Factory blaze adds to computer chip supply crisis

One of the car industry's biggest computer chip suppliers has warned that a major fire at one of its factories in Japan could have a "massive impact" on its ability to fulfil orders.

The incident comes at a time when supplies of chips to the auto industry were already running short.

Shares in the semiconductors firm Renesas fell, along with its clients including Toyota, Nissan and Honda.

Elsewhere, Volkswagen has said chip scarcity might last until the autumn.

"I think things will get stable by the fall but certainly its going to be complicated, and its going to be challenging but I think we'll navigate it," Scott Keogh, VW's North America chief executive told the BBC.

He added that some of the company's plants were likely to run less shifts a day, but added that he hoped factory shutdowns could be averted.


Clean rooms

Renesas has said the blaze occurred last Friday, and was caused by a plating tank catching fire as a result of an electrical "overcurrent", whose cause is still being investigated. It took fire fighters more than five hours to put out.

The fabrication plant involved is based in the city of Naka, in the eastern province of Ibaraki. It specialises in 300mm wafers, making it one of the company's most advanced facilities.

The firm has said there were no human casualties, but 11 of its manufacturing equipment units were damaged.

And because this occurred in one of its environmentally-controlled "clean rooms" - which are designed to avoid any dust or other particles from ruining the tiny transistors and circuits involved in a chip - efforts to restart production will involve more than just swapping out the ruined kit.

While Renesas said the majority of the products manufactured using the affected machines could in theory be manufactured elsewhere, the wider supply shortfall will make that difficult to achieve in practice.

The company has said it hopes to restart production in a month, but the Nikkei Asia news site said it could take three months before output is back to normal.

Ice and drought

Renesas has said that it has about a one-month stockpile of chips to continue fulfilling automakers' orders - so the impact to car production will not be immediate.

But it comes at a time of crisis.

New cars often include dozens of microprocessors.

At the start of the coronavirus pandemic, car-makers cut orders for the components because of a slump in sales of their vehicles.

When the market rebounded towards the end of 2020, they found it hard to find supplies because other consumer electronics makers had stepped in with orders of their own to meet higher than normal demand for their gadgets because of lockdowns.

In addition, February's freezing weather in Texas closed chip-making plants there.

US trade restrictions placed on the telecoms firm Huawei and chip-maker SMIC, among others, have caused other Chinese companies to stockpile supplies of their own.

And a drought in Taiwan is threatening production there. Wafer manufacturing requires a lot of water.

Stocks drop

Many car-makers have slowed or temporarily halted production at some of their plants. It had earlier been estimated that they faced losing more than $60bn (£43.3bn) of sales as a result.

Toyota is among Renesas's customers

"Given that automotive semiconductor capacity is very stretched right now, this fire is effectively a blow upon a bruise, so to speak," commented Richard Windsor, owner of research firm Radio Free Mobile.

"But because following 2011's Fukushima nuclear disaster, Toyota ordered all its suppliers to keep more inventory than it had done in the past, it's quite possible it won't be as badly impacted as Honda and Nissan."

Renesas' stock fell 4.9% in Tokyo trade on Monday.

Toyota's fell by 2.6%. Honda's by 3.6%. And Nissan's by 3.7%.

Memory chips


Elsewhere, there has been further evidence of constrained chip production having wider knock-on effects.

The Nikkei Asia reported on Sunday that the price of memory chips had risen 60% since the start of 2021. It noted that supplies of older chips were particularly constrained, which would impact printer-makers among other gadgets that rely on them.

And last week, Samsung's co-chief executive Koh Dong-jin warned of a "serious imbalance in supply and demand of chips in the IT sector globally".

Although the South Korean company is unusual in that it both designs and manufactures state-of-the-art chips for use in its own products and others, it still relies on third-party supplies. And it has faced a shortage of application processors from the US firm Qualcomm.

Qualcomm's chief executive commented indirectly on the issue at the China Development Forum in Beijing on Saturday.

Steve Mollenkopf predicted that supplies of some older-technology chips would recover before their newer counterparts, adding: "So, depending on the product, you may be in a position to get some improvement."

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
×