Chip Shortage 'Will Last Until Next Year'

  • By Sung Ho-chul

    September 23, 2022 12:41

    The head of automotive semiconductor manufacturer Renesas Electronics has said the current chip shortage is bound to continue until the middle of next year.
    "The problem is not a shortage of key semiconductors, but a lack of minor chips used in peripherals," said Renesas CEO Hidetoshi Shibata (50) in Tokyo on Sep. 13. He said people might be surprised the "minor" chips even exist and it will "take time" for the shortage to ease.
    Renesas is one of the world's top three automotive chipmakers along with NXP of the Netherlands and Infineon of Germany. Other industry insiders expect the chip shortage to ease around the end of this year, but sporadic deficiencies are expected to continue, according to Shibata.
    Hidetoshi Shibata
    The Japanese company, born out of the 2010 merger of the microchip units of Hitachi, Mitsubishi and NEC, generated record sales of 993.9 billion yen and an operating profit of 173.8 billion yen last year. Its estimated sales in the first nine months of this year stand at 1.1 trillion yen.
    Shibata was responsible for a 130 billion yen investment in Renesas when he was an executive of a fund operated by the Japanese government and the private sector to spur innovation.
    An engineering graduate of the University of Tokyo, Shibata received an MBA from Harvard University. He moved to Renesas despite warnings that the shift would be "suicide."
    "It was terrible at first. There were too many people and factories," he recalled. "The first step was to slim down to fit the business."
    Renesas had 47,000 workers just after the merger, but the new CEO drastically trimmed that down to 20,000 and arranged badly needed infusions of money.
    He then went on an acquisition drive, buying U.S. chip maker Intersil in 2017, Integrated Device Technology in 2019, the U.K.'s Diaolog Semiconductor and Israel's Celeno in 2021 and U.S.-based Reality AI and India's Stradian in 2022.
    As a result, Renesas emerged as a major player in the market for embedded chips, which are being increasingly used in home appliances and cars. Shibata said he wanted to grow Renesas into a major player in the embedded semiconductor market instead of the memory chip sector that is dominated by Korea and Taiwan.
    "Until now, computing capabilities were only necessary in computers and smartphones, but from now on, computing power will be needed in all daily objects," Shibata claimed. "Demand for semiconductors will surge in cars, robots, healthcare and factory automation." He added that the strength of Renesas is that it has products and technologies "throughout the whole fields of semiconductor chips" not just making memory chips.
    Renesas is viewed as the leader in the revival of Japan's semiconductor industry, but Shibata said, "I really don't know. Japan disappeared from the global semiconductor map and has only just returned. I want the company to grow over the next eight to 10 years so it can aim for the top spot."
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