[Car Semiconductor Shock] Cars at a Standstill, Searching for Alternative Manufacturers in the 'Semiconductor Securing Battle'

Honda Faces Disruptions Starting Next Month
Nissan Prepares for Long-Term Impact "Until Second Half"
Domestic Companies Also Halt Operations
Governments Worldwide Send SOS to Taiwan

[Asia Economy Reporters Jaehui Kwon, Changhwan Lee] The shortage of automotive semiconductors, which began due to supply disruptions caused by COVID-19, has escalated into a global emergency for car manufacturers as it coincides with the Renesas fire incident. The suspension of factory operations is expected to impact production volumes. Governments worldwide are actively utilizing diplomatic channels to secure semiconductor supplies.

◆ Honda faces disruptions from April, Nissan prepares for a prolonged struggle = Amid a cold wave in the U.S. that halted production at NXP and Infineon?ranked first and second in the automotive semiconductor market?and now with Renesas also experiencing setbacks, global automakers are scrambling to devise countermeasures.

The Japanese auto industry is the hardest hit by the 'Renesas shock.' Japanese automakers, who have significant dealings with Renesas, anticipate semiconductor supply difficulties until the end of July. Toyota is reportedly reviewing which specific models are affected by semiconductor shortages while assessing inventory and seeking alternative manufacturers. A senior Toyota official stated, "We can manage production by gathering inventory until June, but it will be difficult after July," adding, "We are exploring whether alternative production is possible through semiconductor manufacturers other than Renesas."

Honda expects production disruptions for some models starting as early as the end of next month. A senior Honda official said, "If it takes more than a month to recover from the Renesas fire, production disruptions for some models will be inevitable from late April."

Nissan is preparing for a long-term response. A senior Nissan official said, "The shortage of automotive semiconductors is expected to be resolved no earlier than summer," and "We are preparing countermeasures as we anticipate the impact to last through the second half of the year."

◆ Domestic automakers also halt operations one after another = Domestic automakers are also suspending operations one after another due to the automotive semiconductor supply shock. Hyundai Motor Company will halt operations at its Ulsan Plant 1 for one week starting April 7. Ulsan Plant 1 is a key Hyundai factory producing future vehicles such as the Ioniq 5 and Kona EV (electric vehicle).

Hyundai explained that the shutdown is due to supply disruptions of front camera semiconductors for the Kona and PE modules for the Ioniq 5. PE modules are drive component modules such as motors, inverters, and reducers in electric vehicles, similar to the powertrain in internal combustion engine vehicles. Industry estimates suggest that supply disruptions will cause production losses of approximately 6,000 units for the Kona and 6,500 units for the Ioniq 5 during April.

Hyundai is currently checking automotive semiconductor inventory on a weekly basis and negotiating directly with semiconductor manufacturers to secure supplies, but the situation appears to be worsening. Consequently, the suspension may extend beyond Plant 1 to Plants 2 through 5. Currently, other plants are unable to schedule weekend overtime work for the first week of April. Other domestic automakers are also experiencing impacts. Kia Motors canceled weekend overtime at its Hwaseong plant in April. Korea GM plans to reduce the operating rate of its Bupyeong Plant 2 to 50% next month, following last month’s reduction. Bupyeong Plant 2 produces models such as the Malibu and Trax.

◆ Governments intensify diplomatic efforts to secure semiconductors = As the semiconductor shortage continues, the Japanese government has also taken active measures. Hiroshi Kajiyama, Japan’s Minister of Economy, Trade and Industry, stated, "We have requested some Taiwanese semiconductor manufacturers to produce replacements related to the Renesas factory fire," and "The Ministry of Economy, Trade and Industry is negotiating with multiple equipment manufacturers to enable Renesas to quickly procure semiconductor manufacturing equipment."

Despite government efforts to secure alternative equipment, a short-term resolution is expected to be difficult. The Nihon Keizai Shimbun reported that the plating equipment damaged in the Renesas factory fire is rarely available on the market, and even if the product specifications match 100% with existing equipment, it takes at least about a month to get it operational.

South Korea also reportedly sent government officials to Taiwan earlier this month to discuss semiconductor supply issues. This is an unusual move since diplomatic ties with Taiwan were severed in 1992, making it the first time government officials have flown directly to Taiwan. The Taiwanese government expressed willingness to cooperate as much as possible with South Korea’s requests, but it cannot fully meet all demands. Globally, semiconductor shortages have led countries such as Germany and the U.S. to also request increased semiconductor production from Taiwan. Ahead of South Korea, the U.S., Japan, and Germany requested increased production from Taiwan’s TSMC as early as January.

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