Renesas Factory Fire: Added Strain on Chip Supplies
Update: I hope you bet the over! Renesas has announced that their Naka factory has been back to full production since the evening of June 24.
The automotive industry can't catch a break. The most recent event in a series of unfortunate ones—a fire at Renesas' Naka factory—has added to an already strained supply of automotive chips.
Renesas CEO Hidetoshi Shibata foresees an impact on an already disrupted industry, "we are concerned that there will be a massive impact on chip supplies; we will pursue every means possible to minimize the impact.”
If there is one silver lining to the factory fire, no casualties were involved and no toxic leaks have been detected as of yet.
What Chip Types Are Made at the Naka Renesas Factory?
The fire at the Naka fab broke out at the 12-inch wafer production line. An overcurrent in the plating equipment caused the fire. Renesas estimates about 5% of the factory's first floor was destroyed. Although the 5% figure may seem minor, the entire factory has to be shut down to allow for cleaning and repairs.
The primary commodities manufactured at the Renesas fab in the Ibaraki Prefecture are MCUs and SoCs primarily used in the automotive industry but also used for industrial and IoT applications. The affected chip ranges are likely from the 40nm node to the 90nm node. Automotive PMICs are also estimated to be affected by the fire, per TrendForce.
A Rush of External Support
In rapid response, Japan's government has rushed to get the Renesas fab back up and running. The quick response should come as no surprise, as the current semiconductor shortage is only made worse by this factory fire.
It can take several months for an impact to be realized when an unforeseen event like this happens.
With such a tight supply of wafers available industry-wide, the Renesas shutdown comes as a huge hit to Japan's economy and to the customers relying on Renesas chips and components. Because of this, Japan is really putting their foot on the gas to get the fab up and running so Renesas' customers are not affected more than they already will be.
Japan's Ministry of Economy, Trade, and Industry has already begun procuring new equipment for the factory in the hopes of a quick restart.
Japan's top two exports are automotive vehicles and automotive chips. Suffice it to say a Renesas factory restart—a quick one—is the top priority.
When Will the Renesas Factory Be Open Again?
For factory restarts, "quick" is a relative term. Look at Samsung's S2 fab shut down, there are always unforeseen delays that further draw out the reopening process.
Renesas is currently assessing the damage and planning its response measures, but the automaker has said that it aims to reopen within a month. Whether or not that goal is met remains to be seen.
What's the Over/Under?
If I were a betting man, I would be interested in seeing what the over/under is for the Renesas factory's reopening. For all of you non-gamblers out there (good for you), the over/under is best explained with an example:
Renesas has come out and said they expect the factory to reopen within a month—30 days. Yet TrendForce analysts have said they expect—with conservative estimates—the factory not to be restored at full production for at least 90 days. So let's split the difference and use 60 days as the number for our over/under.
If you think it will take longer than 60 days to restart the fab site, you'll bet the over. If you think it will take fewer than 60 days, you'll bet the under.
Looking at past factory restarts like the Samsung S2 fab in Texas, you can begin to formulate your odds for the over/under. Samsung estimated up to 3 months of closure when its fab was shut down in February due to the winter storms in Texas. In order to avoid significant damage, equipment at the site was moved to storage and is now in the process of being moved back. The site is still not back to full production and the estimate of a return to full production in May remains uncertain.
And Samsung doesn't have to deal with sweeping ashy debris, fixing structural fire damage, and bringing in new equipment like Renesas needs to do before its reopening.
While Renesas may have its government helping out with getting things back to full production, a betting man might lean toward taking the over.