Renesas to speed up recovery in auto chip supplies

HITACHINAKA, JAPAN: Renesas Electronics Corp , a major supplier of automotive chips, said it would restore supply capacity lost due to earthquake damage by the end of September, one month earlier than previously planned.

Chip supplies from Renesas's key Naka plant, 130 kilometres (80 miles) northeast of Tokyo, will be lifted back to pre-March 11 levels in large part by outsourcing to other plants, although the earlier recovery date was made possible primarily by faster-than-expected progress in restoring the plant itself, the company said on Friday.

The world's biggest maker of microcontrollers had become a bottleneck in the automotive supply chain, forcing Japan's carmakers to halve production rates.

Several Japanese manufacturers have announced speedier-than-anticipated recoveries from the March disaster, just as investors are looking for encouraging signs that the time has begun to start investing again in the world's third-largest economy.

Renesas, which supplies Toyota Motor Corp , Nissan Motor Co and Honda Motor Co , has been shifting production to other factories and to Singapore's GlobalFoundries .

"We will reassess production at home and abroad (in the wake of the March 11 quake)," Renesas President Yasushi Akao told a news conference.

The Naka plant makes key chips used in car electronics, factory automation systems and home appliances, as well as cutting-edge chips for handsets and car navigation systems.

The quake and subsequent tsunami savaged Japan's supply chains, forcing silicon wafer market leader Shin-Etsu Chemical to suspend production at its largest plant, while halting production of rubber parts and paint additives.

Renesas, formed from the union of chip operations at Hitachi Ltd , Mitsubishi Electric Corp and NEC Electronics, was the world's No.5 chipmaker last year, after Intel , Samsung Electronics , Toshiba Corp and Texas Instruments .

The chipmaker's specialty -- microcontrollers -- are small computers on a single sliver of silicon and are used especially for automated functions such as powering windows or controlling brakes and engines.

Renesas, which competes with STMicroelectronics and Freescale Semiconductor, has a roughly 30 percent global share in the market for those chips.

Before the news conference, Renesas shares closed up 0.6 percent, while the Tokyo electrical machinery index ended little changed.