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Old 04-11-2011, 02:07 PM   #1
AVANTI R5
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Join Date: Nov 2004
Default The big threat: Chip shortage

Quote:
TOKYO -- The world's largest maker of automotive microcontrollers -- the electronic brains that control millions of vehicles built by major automakers -- is shifting production from a key crippled plant to two other plants, but it will take months before shipments can start.

The move by Renesas Electronics Corp., which controls 41 percent of the global automotive chip market, signals months of shortages of the highly specialized parts, already in tight supply before the March 11 earthquake in Japan. Japanese and North American automakers could face production shutdowns if the pipeline runs dry.

Renesas will move production from its Naka plant, which built 25 percent of its chips, to one plant in Singapore and one in western Japan. The transfer could take up to two months. The Naka plant won't resume partial operation until July.

And the manufacturing process for microchips can take up to two months, meaning it could be four months before those new sites are shipping finished products.

A modern vehicle uses 30 to more than 100 microchips, essential in such things as parking brakes, engine control units, entertainment systems, stability control and power steering. They are highly complex and often use-specific, which means they can't easily be re-sourced.
"The situation is quite difficult," says Matteo Fini, a senior analyst for the consulting firm Supplier Business, a division of IHS Automotive. "I see too many problems trying to replace these devices."

For example, each engine control unit is designed to match the characteristics of a particular powertrain. Microcontrollers are designed to run on a variety of voltages. Automakers use different programming languages, and the computer chips may have a different number of connecting pins. "It's a fragmented universe," Fini says.

And rival chip makers such as Freescale Semiconductor, Infineon Technologies and Texas Instruments cannot easily step up production.
Electronics suppliers such as Robert Bosch GmbH already were scrambling to bolster lean inventories of computer chips. The earthquake "has not made this critical situation any easier," says Bosch spokeswoman Cheryl Kilborn.

The situation is especially difficult for Toyota Motor Corp., Renesas' biggest end user. It is estimated that 80 percent of the microchips in the Lexus LS 460 come from the Japanese chip maker.
Robert Young, Toyota's purchasing chief in North America, declined to comment on specific suppliers. But in an e-mailed response, he confirmed that Toyota is "concerned about the global supply of electrical components."

Indeed, Toyota is worried about a long list of components, not just computer chips. It has 217 Tier 1 suppliers in Japan. As of Friday, its surveys of Tier 1 suppliers had identified 150 components whose supply could not be guaranteed.

A trend soon emerged: Electronics parts -- including wafer boards, connectors and electric wire -- were a big worry.

Toyota Motor Corp. said Friday that it will resume limited assembly at all 18 domestic plants from April 18-27, after more than a month with all but two factories offline.

Toyota was the last automaker to announce it would restart all its plants after the earthquake. But its race to come to grips with its supply chain problems underscores the challenges faced by all of Japan's automakers as they fight to restore full production.

When a supplier was identified as sourcing from an at-risk parts maker, Toyota urged the supplier to visit the subsupplier and hammer out problems. It even provided contact information.

But some factories were closed and turning away visitors, said one supplier executive. "All you could do is take a picture of you at the plant to show Toyota you tried," he said.

Meanwhile, switching to a new Tier 2 supplier is easier said than done. Doing so often requires Tier 1 suppliers to submit process change requests or design change requests to carmakers that can take up to several weeks for approval in complicated cases.

And some parts are unique, so no replacements exist. Finding a new supplier for the complex computer chips that control engines or infotainment systems "tends to be quite messy," Fini says. "I think Renesas' customers will try to stick with Renesas as long as it says it can supply the parts."
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