Chip Shortage Expected To Ease As Renesas Says Will Restore Fire-Hit Plant Back To Full Capacity By Mid-June

Renesas Electronics Corp RNECY said on Tuesday its semiconductor plant in Japan damaged by fire on March 19 will now be fully back up by mid-June, compared with an earlier timeline of May-end. 

What Happened: The chipmaker said it had completely procured the equipment damaged in the fire and plans to start up the machinery by mid-June following which the production capacity will return to 100% of the pre-fire levels.

Renesas had in mid-April resumed partial operations at the Naka plant's 300mm chip line, which returned to about 88% capacity of pre-fire levels at the end of May.

Why It Matters: The Japanese chipmaker, which makes nearly a third of the microcontroller chips used in cars around the world, suffered a setback after a fire at its Naka facility further aggravated the ongoing global semiconductor shortages. 

The company had previously said it would need about 100 days to bring the factory back to full shipment. The supplier of advanced semiconductor chips had last month warned it expects a 30% dent in six-month profit attributable to the owners of the company due to the fire.

A majority of automakers are suffering as a consequence of the chip shortage including the Ford Motor Company F, Tesla Inc TSLA, and Nio Inc. NIO.

Tesla CEO Elon Musk late Monday said the electric vehicle maker was forced to hike prices due to supply chain constraints. 

Price Action: Renesas shares closed 5.35% lower at $5.13 on Friday.