By Juro Osawa
Published March 29, 2011 12:00AM
At this point, we don't know when we can go back to normal production," Renesas spokeswoman Makie Uehara said.
Electronics and automakers worldwide could be hurt by reduced output from Renesas, which makes key components.
Operations are suspended at three plants; two others are running at a sharply reduced rate. At one of the shut-down plants, the company is only starting to assess the physical damage, while the other two may be down as long as power-supply problems continue.
Renesas, which merged with operations of NEC last year, accounted for $US3 billion ($2.92bn) of the $22.9bn in chips sold worldwide for automotive applications last year, Egil Juliussen, an analyst at research firm IHS iSuppli, said.
The company accounted for 41 per cent of the chips purchased by Japanese automakers, Mr Juliussen said. Those companies use Renesas chips for a broad range of functions, including controller chips that manage engines, transmissions, air conditioning and brakes. But Renesas also had a strong position in vehicles built outside of Japan -- particularly among companies that supply navigation and entertainment systems, he said.
With the outlook uncertain for Renesas and other component suppliers to resume shipments, iSuppli predicted that auto production would be affected by the end of next month in most or all regions, Mr Juliussen said.
"This is the downside of just-in-time manufacturing," he said, referring to the popular strategy of saving money by stocking low inventories of components.
Renesas clients include Robert Bosch, Denso, Hitachi and Mitsubishi Electric, according to someone familiar with the matter.
Renesas has 10 plants across Japan involved in the early stages of chip production, including five in the broad area affected by the quake and tsunami. Of those five, the most severely affected is the Naka plant in Ibaraki prefecture, which accounts for about 15 per cent of the company's overall early-stage capacity -- producing about 25 per cent of the company's microcontrollers and also making large scale integration chips for mobile phones and car-navigation systems in cars.
According to Renesas, the Naka building is still standing, but some walls are cracked or partly destroyed and some windows are shattered. It is likely some power lines have been cut. The company has just restored lighting; the next step is to get more power for the clean rooms so the machines can be turned on and inspected. Before considering whether to shift production elsewhere, Ms Uehara said, the company had to find out how long it would take to restore operations at Naka.
The two other plants where operations are suspended are the Takasaki plant in Gunma prefecture and the Kofu plant in Yamanashi prefecture, which together account for about 15 per cent of the company's early-stage chip production capacity. Both have been disabled by Tokyo Electric Power's decision to rotate power outages to address supply shortages.
The early stages of chip production require clean-room equipment to run around the clock on a stable power supply. Once a machine is turned off, it can take up to a week to start it up again, because every part first needs to be inspected.
At the company's two other early-stage chip production plants in northern Japan -- Tsugaru plant in Aomori prefecture and Tsuruoka plant in Yamagata prefecture -- production has resumed with reduced capacity, because power from the region's Tohoku Electric Power, while stable, is limited. The Tsuruoka plant is running at 5000 wafers a month, compared with 23,000 before the quake. Even if the supply problems are solved, there are concerns over a shortage of materials.
Published March 29, 2011 12:00AM
At this point, we don't know when we can go back to normal production," Renesas spokeswoman Makie Uehara said.
Electronics and automakers worldwide could be hurt by reduced output from Renesas, which makes key components.
Operations are suspended at three plants; two others are running at a sharply reduced rate. At one of the shut-down plants, the company is only starting to assess the physical damage, while the other two may be down as long as power-supply problems continue.
Renesas, which merged with operations of NEC last year, accounted for $US3 billion ($2.92bn) of the $22.9bn in chips sold worldwide for automotive applications last year, Egil Juliussen, an analyst at research firm IHS iSuppli, said.
The company accounted for 41 per cent of the chips purchased by Japanese automakers, Mr Juliussen said. Those companies use Renesas chips for a broad range of functions, including controller chips that manage engines, transmissions, air conditioning and brakes. But Renesas also had a strong position in vehicles built outside of Japan -- particularly among companies that supply navigation and entertainment systems, he said.
With the outlook uncertain for Renesas and other component suppliers to resume shipments, iSuppli predicted that auto production would be affected by the end of next month in most or all regions, Mr Juliussen said.
"This is the downside of just-in-time manufacturing," he said, referring to the popular strategy of saving money by stocking low inventories of components.
Renesas clients include Robert Bosch, Denso, Hitachi and Mitsubishi Electric, according to someone familiar with the matter.
Renesas has 10 plants across Japan involved in the early stages of chip production, including five in the broad area affected by the quake and tsunami. Of those five, the most severely affected is the Naka plant in Ibaraki prefecture, which accounts for about 15 per cent of the company's overall early-stage capacity -- producing about 25 per cent of the company's microcontrollers and also making large scale integration chips for mobile phones and car-navigation systems in cars.
According to Renesas, the Naka building is still standing, but some walls are cracked or partly destroyed and some windows are shattered. It is likely some power lines have been cut. The company has just restored lighting; the next step is to get more power for the clean rooms so the machines can be turned on and inspected. Before considering whether to shift production elsewhere, Ms Uehara said, the company had to find out how long it would take to restore operations at Naka.
The two other plants where operations are suspended are the Takasaki plant in Gunma prefecture and the Kofu plant in Yamanashi prefecture, which together account for about 15 per cent of the company's early-stage chip production capacity. Both have been disabled by Tokyo Electric Power's decision to rotate power outages to address supply shortages.
The early stages of chip production require clean-room equipment to run around the clock on a stable power supply. Once a machine is turned off, it can take up to a week to start it up again, because every part first needs to be inspected.
At the company's two other early-stage chip production plants in northern Japan -- Tsugaru plant in Aomori prefecture and Tsuruoka plant in Yamagata prefecture -- production has resumed with reduced capacity, because power from the region's Tohoku Electric Power, while stable, is limited. The Tsuruoka plant is running at 5000 wafers a month, compared with 23,000 before the quake. Even if the supply problems are solved, there are concerns over a shortage of materials.
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