…and Speaking of Shortages…
A fire at a Renenas (6723.JP) semiconductor fab yesterday has set in motion another round of concerns over the availability of automotive related silicon products. The Renenas line that was affected was in Naka, Japan, and while it is early for estimates, we have already seen expectations for anywhere from a month to 6 months to fully restart the 300mm line that operates at the 28nm node. Renesas also has a 200mm line that was not affected by the fire. ~2/3 of the 300mm line’s production was for automotive products which are already in short supply, causing some manufacturing slowdowns. Inventory levels will begin to be affected in about 30 days as existing parts and worked down.
Given that smoke from the fire filled the clean room, we expect much of the production that was on the line will have to be scrapped and while the Japanese government has offered to help Renesas to ‘quickly acquire alternative manufacturing equipment’, a nice idea if the equipment was available and not pledged to other suppliers who are trying to expand capacity. We note that the Renesas plant was shut down for three days last month after an earthquake, which reduced available inventory to make up for lost production, increasing the impact of the fire, and further raising concerns that automotive suppliers will face additional shortages.
Given that smoke from the fire filled the clean room, we expect much of the production that was on the line will have to be scrapped and while the Japanese government has offered to help Renesas to ‘quickly acquire alternative manufacturing equipment’, a nice idea if the equipment was available and not pledged to other suppliers who are trying to expand capacity. We note that the Renesas plant was shut down for three days last month after an earthquake, which reduced available inventory to make up for lost production, increasing the impact of the fire, and further raising concerns that automotive suppliers will face additional shortages.
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