Global Automotive Chip Supply Shortage to Deepen

The author is an analyst of NH Investment & Securities. He can be reached at hwdoh@nhqv.com. -- Ed. 

 

Recently, a fire broke out at the Naka plant of Renesas, the world’s second-largest automotive chip provider. The event is seriously to impact automotive chip supply, with rivals such as NXP and ST Micro standing to benefit.

Fire breaks out at Renesas’ Naka fab

On Mar 20, a fire broke out at the Naka plant of Japanese chipmaker Renesas. The cause of the accident has been confirmed to be an overcurrent in plating equipment located on the first floor of the N3 building (300 line). The burned area is approximately 600m2, representing around 5% of the 12,000m2 clean room area of the first floor N3 building.

The fire destroyed 11 machines (including 4 for use in the WLP RDL process), or about 2% of the plant’s manufacturing equipment. Supplementary facilities, including wafer transport systems, were also damaged by the fire. That said, production is operating as usual at both the N2 building (200mm line) and the WT building (wafer testing).

Global automotive semiconductor supply shortage to deepen

Renesas said that it will take at least a month to restore its facilities following the fire. Production at the Naka 300mm fab divides as MCU 64%, SoC 34%, and analogue chip 2%. By application, automotive semiconductors account for 66% of its total production. The main process is 90nm, and product lead time stands at 70 days. Noting that the firm holds a month’s worth of inventory, we believe that the ramifications of the fire will start being felt in earnest in 2Q21. 

Amidst an ongoing serious supply shortage of non-memory semiconductors (especially automotive MCUs), multiple automotive firms have had to cut down their production volume. Given that Renesas is the world’s number-two automotive semiconductor player (27% M/S), global automotive semiconductor shortages will likely worsen further in the wake of the fire. Meanwhile, Renesas’s competitors NXP and ST Microelectronics stand to benefit.

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