Global car industry’s chip shortage worsens after Renesas fire and bad weather
A fire at a semiconductor factory in Japan, cold weather in North America and continuing competition for chips are all hitting the global car industry at once, threatening to exacerbate shortages of a key component, which began late last year.
A clean room at a plant run by Renesas Electronics, one of the top providers of automotive chips, was damaged by fire on Friday, the company said. The incident will probably have a big impact on the car industry, chief executive Hidetoshi Shibata said yesterday.
Global car makers were already coming to grips with a shortage of chips caused by booming demand for laptops, tablets and home electronics by people staying and working indoors during the pandemic.
Now, with supply chains already under strain, they must contend with bad weather and other unexpected disruptions to keep up production and recover from the steep drop in 2020 sales due to Covid-19.
“I am concerned that this will have a very big impact,” said Mr Shibata.
He said Renesas intends to resume operations at the factory within a month and expects ¥17 billion ($156 million) in lost revenue because of the incident.
“We will pursue every possible measure, including the use of output alternatives, to make the impact as minimal as possible.”
Renesas generates about 6.6 per cent of its revenue from Toyota, one of its main customers, according to Bloomberg’s Supply Chain Analysis. It posted ¥715.7bn in revenue last year.
Toyota also issued a warning that cold weather-induced semiconductor shortages will force it to suspend a factory in the Czech Republic for two weeks.
“This is terrible for the car industry supply chain; they might have to move towards holding more inventory,” Bloomberg Intelligence analyst Masahiro Wakasugi said of the Renesas fire.
The big question is whether Toyota, which has managed its supply chain better than other car makers, will be hit, he said.
Other car makers issued warnings of chip-induced disruptions over the past week.
Ford said the semiconductor situation and parts shortages created by the US winter storm in February would cause some production to be idled.
F-150 trucks and Edge SUVs will be assembled without certain parts, including some electronic modules that contain scarce chips.
Nissan is adjusting production schedules in North America because of semiconductor shortages.
Operations at Smyrna, Tennessee, and Canton, Mississippi, were affected while the car maker’s Aguascalientes plant in Mexico will be offline tomorrow, according to spokeswoman Azusa Momose.
Honda said there would be disruptions at some plants in the US and Canada after the pandemic, a chip shortage and severe winter weather affected its supply chain.
The car maker will halt work at plants in Marysville and East Liberty in Ohio, as well as others in Indiana, Alabama and Ontario, potentially for a week, it said. Volkswagen’s Autoeuropa plant in Portugal will halt production from March 22 to 28 due to a shortage of semiconductors.
BMW’s chief executive Oliver Zipse said the German car maker could not guarantee that it would avoid production stoppages related to the global shortage, despite having avoided disruptions so far.
Mitsubishi is reducing domestic output of vehicles by 4,000 to 5,000 units in March due to a shortage of semiconductors. It is reviewing its production plans for next month.