The Renesas fire plant will restart in mid-April and the three major Japanese car companies plan to cut production.

According to foreign media reports, Renesa said on March 30 that a fire-hit chip factory is expected to restart production in mid-April.

On the evening of March 19th, a fire broke out on a production line at Renesas's Naka factory, north of Tokyo, and then the factory shut down. Hidetoshi Shibata, chief executive of Renesas, said on March 30th that production at the plant would restart, as previously expected, a month after the fire broke out.

The company said it was not clear why an electroplating machine caught fire due to excessive current. The fire, which broke out on a production line dealing with 300mm wafers, lasted five and a half hours, damaged 23 equipment and destroyed 600 square meters of production area, accounting for about 4% of the total clean room space.

Although progress has been advanced in the recovery of the damaged clean room, it may take about 100 days to fully resume production, he said. He added that about 3/4 of production work was not affected by the fire.

Renesas's chips are used by almost all automakers, including Toyota, Ford and Nissan, and about half of the company's revenue comes from car chips. Shibata said the impact of the fire on its sales could be between 17.5 billion yen and 24 billion yen (about $160 million to $218 million).

Nomura (Nomura Securities) estimates that Renesas's chip production disruptions could reduce global car production by 1.6 million vehicles in the second quarter, or 7 per cent of planned production.

Production disruptions at Renesas have had an impact on carmakers. A Toyota executive said: "our chip inventory will probably last until June, but after July, we will have some problems." Renesas is one of Toyota's main chip suppliers. Another Toyota executive said: "We expect Renesas to take some time to resume production, which is an extremely difficult situation." We have no choice but to make a plan to stop production. We are evaluating inventory and conditions to predict which models of chips may be used up. "

A Honda executive said: "by the end of April, the production of some of our models may begin to be affected." Nissan is also considering cutting production. "it all depends on whether we can make up for the losses in the second half of the fiscal year," said a senior executive. "

The accident is likely to have an impact on areas outside Japan. Renesas is a major supplier to the German auto parts manufacturer on the mainland. If mainland production falls, European and US carmakers will also be affected.