Renesas Aims for Full Return of Fire-Hit Chip Plant by July

(Bloomberg) -- Renesas Electronics Corp. said it is aiming to resume shipments from its fire-hit chip factory at full capacity by early July, roughly in line with its previous target.

The Japanese chipmaker suffered a fire at its facility in Naka, north of Tokyo, on March 19, exacerbating shortages in the technology supply chain as it recovers from the Covid-19 pandemic. The company, which restarted partial production at the plant over the weekend, had said previously it would need about 100 days to bring the factory back to full shipments.

“I appreciate all the help from our partners that enabled us to restart the factory without falling behind,” said Chief Executive Officer Hidetoshi Shibata at a briefing in Tokyo on Monday.

Shibata said the plant should be able to resume full production in late May and then reach its previous shipping volumes about a month later. He said it may take slightly longer than 100 days, by a week or 10 days.

The company’s shares rose 4.3% on Monday.

The incident hit as the global semiconductor industry is suffering through unprecedented shortages, leaving automakers in particular short of components that they need for their vehicles. Even before the fire, car manufacturers were expected to miss out on $61 billion of sales this year alone. Renesas is one of the top providers of automotive chips, used by virtually all the top carmakers.

Read more: Renesas Restarts Fire-Hit Chip Factory Days Ahead of Schedule

Renesas warned in March that there would be a vacuum of about a month when the company would be unable to ship chips from the factory. The company had asked other chipmakers to deliver components to customers on its behalf, but estimated it would lose revenue of as much as 24 billion yen due to the fire.

“Sales in the second quarter could decrease due to the fire, which may reduce the company’s operating income by 10 billion to 15 billion yen,” Bloomberg Intelligence’s Masahiro Wakasugi said.

Shibata declined to provide details of the fire’s financial impact, saying the company would give an update with its next earnings announcement.

Renesas, whose chips are used by Toyota Motor Corp., Ford Motor Co. and Nissan Motor Co., gets about half its revenue from car chips. The Naka plant makes parts used in automotive and industrial applications.

(Updates with shares in the fifth paragraph. A previous version of this story corrected the timeframe of the company’s previously announced plan.)

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