Fire at Chip Plant Adds to Shortage

A fire at a factory of one of the world’s leading auto chip makers has added to the troubles of car makers that already have slashed production because of a semiconductor shortage. The fire left a swath of charred equipment in the factory owned by a subsidiary of Renesas Electronics Corp. in Hitachinaka, northeast of Tokyo. The company said it would take at least a month to restart the damaged operations.

Renesas said heat from an electrical problem inside a single piece of equipment caused the fire and contaminated clean rooms needed to make semiconductors. It said two-thirds of the chips made at the fire-affected factory were automotive chips. Renesas’s chief executive, Hidetoshi Shibata, said Sunday the impact on global chip supplies would be significant. 

According to Reuters, the company has about 30% of market share for microcontroller unit chips used in cars. Renesas says its customers, mostly auto parts suppliers, will begin to see chip shipments plummet in about a month. Global automakers like Honda, Toyota and Nissan are all assessing the ramifications, and one analyst said they would be “facing a difficult situation.”