Auto sector braces for even more chip shortages after fire

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A good fire at a plant owned by Japanese chipmaker Renesas could deepen the ongoing global semiconductor shortage which has especially hampered automobile production.

The company, making chips for Toyota, Nissan and Honda, expects production at among the buildings at its Naka Factory in Hitachinaka to be halted for per month. Shares in all three automakers fell between 2% and 3% on Monday.

Tokyo-based Renesas said the fire started when some equipment overheated and ignited, though it wasn’t noted what caused it to overheat. There have been no casualties or damage to the building.

Renesas said two-thirds of the products manufactured in the building could possibly be produced somewhere else, although “because of the recent increase in demand for semiconductors, the problem does not allow for all products to end up being immediately produced alternatively.”

Separately the other day, Nissan said it had been temporarily shutting down development at factories in Smyrna, Tennessee; Canton, Mississippi; and in Aguascalientes, Mexico, due to the chip shortage.

Volkswagen and Fiat Chrysler (now Stellantis) also mention they have been damaged by the shortage and forced to delay development of some models to keep other factories running.

The chip shortage, coupled with a February winter storm, also just lately forced Ford to build F-150 pickup trucks without some computers. The business said the pickups would be placed at factories for “several weeks,” in that case shipped to sellers once computers can be found and quality checks are done.

Industry officials tell you semiconductor companies diverted production to consumer electronics through the worst type of of the COVID-19 slowdown in auto revenue last springtime. Global automakers were forced to close plants to prevent the pass on of the virus. When automakers recovered, there weren’t more than enough chips as demand for personal consumer electronics boomed.