Renesas Naka plant fire (2021)
A semiconductor clean-room fire in Japan in March 2021 that worsened the global automotive chip shortage: a small physical loss, a very wide business interruption.
A semiconductor plant concentrates rare machines, delivered with months of lead time, in a clean room where the slightest smoke contaminates all work in progress. A limited fire can therefore stop the plant for weeks, while it is cleaned, equipment is replaced and processes are requalified. When that plant is the sole supplier of a component for an entire industry, the loss spreads to customers that suffered no damage, through contingent business interruption. It is the textbook case of an extreme ratio between physical damage and business interruption, and of an indemnity period underestimated because the machines' replacement lead time had not been measured.
On March 19, 2021 at 2:47 a.m., an overcurrent ignited an electroplating unit in the N3 building, the 300-millimeter wafer line of the Renesas Naka plant in Japan: eleven machines burned over about 600 square meters of clean room, and twelve more were affected, twenty-three in all, some of which could not be replaced until after June. Production took about three months to return to its previous level, while carmakers, already short of chips, cut their output. A month earlier, the Texas cold wave had shut several chip plants in Austin.
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