TOKYO -- Renesas Electronics Corp., the world's biggest maker of automotive microcontrollers and a key bottleneck in Japan's parts shortage, plans to shift production of the chips from its last non-operational plant to undamaged factories in western Japan and Singapore.
Renesas expects to announce the timing of the shift next week, a person familiar with the plan said. The move will help alleviate a global shortfall of microcontroller supply -- but only partially.
Renesas' Naka plant in northeastern Japan, which accounts for about 25 percent of its global automotive microcontroller capacity, has been offline since the March 11 earthquake that devastated Japan's manufacturing sector. It is expected to be down at least until July.
Renesas plans to shift some of Naka's production to its Saijo plant in western Japan and another plant operated by an affiliate in Singapore. But that transfer will account for less than half of Naka's output, and it could be another two months before production starts up at those sites.
The manufacturing process for microcontrollers, or MCUs, can take up to two months, meaning that it could be another four months before those new sites are sending finished products to customers.
Anywhere from 30 to over 100 MCUs are used in a modern vehicle, and Renesas controls about 41 percent of the global market -- with 90 percent of its global capacity based in Japan.
The tiny chips are essential to everything from electronic parking brakes, pre-crash seat belts and engine control units to onboard entertainment systems, stability control and power steering.
Damage to plants in Japan has emerged as a key pinch point for global automakers. Tier 1 suppliers that rely on such chips as a sub-component can't supply carmakers without them.