Renesas Electronics Corporation today held a second press conference regarding the occurrence of a fire on March 19, 2021 at part of the processes in the N3 Building (300mm line) of Naka Factory (located in Hitachinaka, Ibaraki Prefecture). The press conference covered the outlook and initiatives taken for resuming production.
The company had initially reported 11 machines were damaged in the March 19th fire, but, following a detailed investigation, the Nikkei reported that the number of inoperable machines was now believed to be around 17. A company spokeswoman would not confirm a specific number, however. Within the total of 23 machine units, 11 units are to be procured within April. On the other hand, some equipment may not be procured until after June. A Renesas spokesperson said they are in discussions with equipment manufacturers to procure the equipment at an earlier date where possible.
Currently, the company expects complete recovery of the clean room of the N3 Building by around mid-April and resume production in one month as initially announced. Regarding production delays, the company released the following statement:
“If we are able to procure all necessary manufacturing equipment by the end of April, we expect to begin product shipment to our customers of the remaining work-in-processes of the first floor of the N3 Building in approximately 60 days after the fire. In approximately 90 days after the fire, we expect to begin product shipment to our customers of the remaining work-in-process of the second floor of the N3 Building, leading to the expectation of 100% recovery of product shipment of products manufactured in the N3 Building to customers approximately 100 days after the fire. However, this is with the premise that all necessary manufacturing equipment can be procured by the end of April, and if there are delays in the procurement, the time it takes to recover to 100% of the product shipment volume before the fire will be also delayed.”
Renesas is said to be looking for alternatives to outsource their production in the interim.
Including the impact of the fire and the finished product inventory worth approximately 2 billion yen in mind, if the N3 production capability took 1.5 months to recover to 100%, the financial impact is expected to be approximately 17.5 billion yen. If it takes 2 months to recover, the financial impact is expected to be approximately 24.0 billion yen.
The company accounts for 30% of the global market for microcontroller units used in cars, and two-thirds of the chips produced at the facility are for the auto industry. An extended outage in production could add to the global shortage of chips which is already disrupting the auto and electronic device sectors.