September 23, 2020

A Japanese Plant Struggles to Produce a Critical Auto Part

No wonder the magnitude 9.0 earthquake that knocked out one of the world’s leading automotive computer-chip factories struck such a severe and lasting blow to the global auto industry.

Since the March 11 earthquake, the lack of chips from this plant is a big reason automobile production has slowed to half its normal rate in Japan, and is at a crawl in some factories in the United States and elsewhere.

And plant officials here on Wednesday acknowledged that this critical link in the supply chain would be restored only gradually, despite the round-the-clock efforts of an army of workers to repair the cracked walls, collapsed ceilings and out-of-kilter equipment caused by the quake.

The factory here, 70 miles northeast of Tokyo, belongs to Renesas Electronics, which supplies about 40 percent of the world market for those crucial chips, known as automobile microcontrollers.

If it were the PC industry, customers by now might have found alternative suppliers for their standardized chips. But because of the way the automobile industry has evolved in the digital era, microcontrollers are usually customized for each car model.

That makes it difficult for automakers to quickly switch suppliers. And it has left manufacturers desperate for Renesas to resume production as soon as possible.

“We have an important role and responsibility,” Tetsuya Tsurumaru, senior vice president in charge of manufacturing at Renesas, said on Wednesday, during the first plant tour for reporters since the disaster. “We are aware of this and are doing our best to restore the supply chain as soon as possible.”

Mr. Tsurumaru said the company hoped to restart microcontroller production on June 15, about a month earlier than previously estimated. But output will initially be only 10 percent of capacity, he said, declining to predict when Renesas would resume full production.

To help meet demand, the company is shifting some production from the factory here to another Renesas factory in Japan not damaged by the quake. It is also farming out some manufacturing of automobile controllers to GlobalFoundries, a contract manufacturer in Singapore that has produced microcontrollers in the past. But shortages are expected to persist for months.

“Let’s show Renesas’s inner strength and unite our hearts to restart in June,” read banners hung from the buildings here. “Customers from all over the world are waiting.”

Thus exhorted, workers have repaired the factory’s ceiling, as well as a crucial air filtering system intended to keep out dust particles that can ruin the microscopic circuitry of the chips.

Test production has begun. Workers in white suits with facemasks and hoods worked in the clean room to repair and realign sophisticated machines that must be precise to billionths of a meter. But red lights next to most pieces of equipment indicated they were not in operation.

To be sure, Renesas is not the only parts supplier knocked out by the earthquake and, in some cases, by the tsunami that followed.

Toyota said recently that it faced shortages of 150 critical parts, not only electronic controllers but also rubber parts and paint additives. The company, Japan’s biggest automobile manufacturer, said it would not be able to resume full production until the end of this year.

Still, as a sign of how crucial this plant is, Japanese automakers, auto parts companies and other customers have sent as many as 2,500 workers to help repair the factory, called the Naka plant.

Automobile companies are not the only ones dependent on Renesas. For instance, Ricoh, maker of copiers and office equipment, gets some customized chips from Renesas. Ricoh executives say the Naka factory is their biggest concern among parts suppliers.

But microcontrollers, which are called mi-con in Japan (pronounced my-kone), are extremely important in automobiles because they act as the brains of electronic control systems.

Article source: http://feeds.nytimes.com/click.phdo?i=d40374b80068ebe83cd15aad54a6f912

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