Renesas to restart Beijing chip factory hampered by COVID outbreak

Tokyo Renesas Electronics Corp. said it will resume work on Tuesday at its Beijing chip factory, which was closed due to COVID-19 infections, ending one of the first stoppages by a major foreign manufacturer.

Renesas, the world’s largest maker of automotive chips, said on Monday it was making up for lost production with existing inventories and did not expect much impact from the shutdown. The factories that stopped production on Friday mainly produce semiconductors used in industrial machinery and consumer electronics, a spokeswoman said.

Still, the suspension serves as a high-profile sign of the potential negative economic impact on China’s foreign manufacturers from the worsening COVID crisis. The recent surge in COVID cases in China has hit major urban centers, swept trading floors in Beijing and is spreading rapidly in Shanghai’s financial hub.

The wave of infections continues to grow as China significantly eased its strict COVID containment measures this month. Health experts say China may now pay a price to protect its elderly, under-vaccinated population with no natural immunity.

Renesas, which makes about one-third of all microcontroller chips used by the world’s automakers, is one of many large Japanese manufacturers operating in China. We also have a factory in Suzhou City in the east.

Given its large manufacturing base in China, it could also be a thorny issue for Japanese automakers.

“Parts shortages continue due to the spread of the new coronavirus infection, and some factories in China are adjusting production.” Toyota A Motor Co. spokesperson said:

Nissan did not immediately respond to a request for comment on its business.

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