Renesas Electronics has announced that it will reduce production of semiconductors for automobiles, as well as review the timing of the start of mass production at its Kofu plant and its mass production plan for SiC power semiconductors.
🟦 Renesas Electronics Announces Production Cuts of Automotive Semiconductors
With the end of the coronavirus pandemic, the supply of semiconductors has been normalized, while the automotive industry has been overstocked. In response to this situation, Renesas Electronics announced a reduction in production of semiconductors for automobiles, a revision of the start date of mass production at the Kofu Plant (Kai City, Yamanashi Prefecture), and a revision of the mass production plan for SiC power semiconductors. In addition, sales for the October~December 2024 period are expected to be about 10% lower than initially expected. In addition, production adjustments will be made from the third quarter, and the capacity utilization rate is expected to decline to the 30% level.
🟦 Background to production cuts: Sluggish demand and delays in optimizing inventories
Renesas’ production cuts are said to be largely due to sluggish demand and delays in optimizing inventory. In response to the semiconductor shortage during the pandemic, automakers and tier-1 parts manufacturers piled up inventories, but the recovery in demand was slower than expected, resulting in excess inventory. In order to reduce inventory, Renesas plans to further strengthen production adjustments in the fourth quarter and reduce inventories by curbing the supply of products from foundries.
🟦Summary
Renesas Electronics announced a reduction in production of automotive semiconductors, adjusted inventories, and reviewed production plans. Due to the impact of excess inventories due to the normalization of supply after the Corona disaster, the Kofu Plant and the mass production plan for SiC power semiconductors were also changed.
It seems that the accumulation of inventories as a response to the semiconductor shortage led to a rebound in excess inventories after the normalization of supply. After all, securing only what you need without hoarding may be a financial choice as a result.
