Automotive slump: Renesas suspends production

March 08, 2019 //By Christoph Hammerschmidt
Automotive slump: Renesas suspends production
In response to weak demand in the Chinese market, chip manufacturer Renesas will temporarily halt production at 13 of its 14 production sites, according to media reports from Japan and the USA.

Renesas Europe did not comment on the news at first, but a press spokesperson referred to a comment on the company's website . The commentary said that management was considering a temporary suspension of production at several front-end facilities for two months and multiple interruptions of back-end facilities for one week at a time, depending on demand trends. Customers would be informed of the measures in a timely manner, it continues.

The temporary closures are reported to take place against a backdrop of high inventory levels - which means nothing less than the company produced higher quantities that it was able to sell.

Specifically, the reports state that all nine Japan-based manufacturing facilities are affected. The suspension of production in the front-end factories is to take effect at the end of April for an initial period of one month. In August, production is also to be suspended for one month. The three backend facilities are to cease their activities for one week each between April and September.

Weak demand was particularly noticeable in the automotive industry in China, the world’s largest automotive market. The demand for chips for industrial production also declined. However, the reports did not contain any concrete figures.

Over the past weeks, several electronics suppliers to the Chinese automotive industry, including Infineon and Continental, lowered reduced their expectations for the year ahead as a consequence of soft demand in China’s hitherto strong automotive sector.

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