Factory Explosion Might Lead To Computer Chip Supply Crisis

One of the car industry’s biggest computer chip suppliers has warned that a serious fire at one among its factories in Japan could have a “massive impact” on its ability to fulfill orders.

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

Shares within the semiconductors firm Renesas fell, alongside 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 it’s going to be complicated, and it’s going to be challenging but I think we’ll navigate it,” Scott Keogh, VW’s North America chief executive said.

He added that a number of the company’s plants were likely to run fewer shifts each day, but added that he hoped factory shutdowns might be averted.

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 remains being investigated. It took firefighters quite five hours to place out.

The fabrication plant involved is predicated within the city of Naka, within the eastern province of Ibaraki. It specializes in 300mm wafers, making it one of the company’s most advanced facilities.

The firm has said there have been 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 quite just swapping out the ruined kit.

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

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

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