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Renesas will not give up TSMC services in the face of component shortages
The Japanese company Renesas Electronics is one of the largest suppliers of semiconductor components for the automotive market. It still maintains its own production facilities, but depends on third-party contractors for advanced lithography. The current industrial crisis did not force the Renesas management to change priorities.
Image Source: Nikkei Asian Review
As General Director of the company Hidetoshi Shibata explained at the quarterly reporting conference, in the first half of this year, the situation with the supply of semiconductor components is unlikely to be normalized, while demand will remain at a high level, with an advantage for the second quarter. The expansion of production capacity, he said, would have taken too long a period, and this year it will not be able to have any effect on the company’s business.
Renesas’ own production facilities are very modest, as explained by the head of the company. It is not possible to transfer the entire volume of products to them. The experience of the current crisis, according to the head of Renesas, will force component manufacturers to keep increased inventories of materials and raw materials to compensate for future surges in demand. Production volumes, according to the company representative, will grow gradually, and significant investments in this area are not expected.
In 2021, Renesas Electronics made a profit of $ 436 million, although it ended the previous year with a loss. Growth in demand for semiconductor components in the past year allows Renesas to end the reporting period without a loss. The drop in demand for cars in the first half of the year, however, outweighed the surge in activity in the second half, and the total revenue for the year decreased by 0.4%. Renesas expects to maintain its own production capacity, but will continue to rely on contract manufacturers for advanced lithography. As noted earlier, the company has already offered a helping hand to one of the Japanese developers, giving him a place on its own assembly line in order to combat component shortages.