Impact of Renesas Fire in Japan on Domestic Automotive Industry

[Asia Economy Reporter Changhwan Lee] The domestic automotive industry is closely monitoring the situation as a fire broke out at the factory of Renesas Electronics, Japan’s third-largest automotive semiconductor manufacturer. There are also forecasts that Hyundai Motor Group will be partially affected.

On the 22nd, Nihon Keizai Shimbun reported that it will take more than three months to normalize production at the Renesas Electronics factory in Japan, which suffered fire damage. At a press conference the day before, Renesas President Hidetoshi Shibata said, "We will do our best to resume production within one month."

Since Renesas mainly supplies semiconductors to local automakers such as Toyota, Nissan, and Honda, it is known that there is no immediate direct impact on Hyundai and Kia.

However, Japanese automakers, who are not receiving parts properly from Renesas, are diversifying their supply sources from other semiconductor companies, which is intensifying the supply shortage in the overall automotive semiconductor market.

Accordingly, Hyundai and Kia are also expecting the parts shortage to worsen and are internally making every effort to secure inventory. While meetings with automotive semiconductor suppliers were previously held irregularly, they are now held daily, and for parts with severe shortages, they are negotiating directly with semiconductor companies without going through partners.

The rising price of semiconductors is also a problem. It is known that companies supplying automotive semiconductors to Hyundai and Kia are currently purchasing semiconductors at higher prices than usual. The semiconductor supply shortage leads to price increases, which could ultimately result in higher consumer prices or an overall decline in profitability for the finished car industry.

An official from the automotive industry said, "Following the suspension of local semiconductor factories due to the unusual cold wave in Texas, USA, and the Renesas fire, signs of prolonged production disruptions caused by the global shortage of automotive semiconductors are emerging," adding, "Our companies are also focusing on securing inventory as the situation is expected to worsen."

This content was produced with the assistance of AI translation services.