Reports: Renesas mulls foundry for MCUs

LONDON – Renesas Electronics Corp., the world's leading maker of microcontrollers that was hit hard by the Japan earthquake of March 11, is in talks on outsourcing the production of automotive microcontrollers to Globalfoundries Inc., according to reports.

Yasushi Akao, president of Renesas Electronics, has said his company has roughly two month's worth of production in completed inventory and back-end processing stages, according to equities research firm Nomura Securities Co. Ltd. referencing Japanese daily Nikkei. In addition, Renesas is in talks to outsource production of automotive microcontrollers to a wafer fab in Singapore belonging to Globalfoundries Inc. and to move some mobile phone IC production to Taiwan Semiconductor Manufacturing Co. Ltd., according to a Bloomberg report. The world's fifth largest chip maker also plans to make automotive microcontrollers at a working wafer fab of its own, Saijyo factory in Ehime prefecture, not used for that purpose before in .

The Globalfoundries wafer fab at the center of discussions is a former joint-venture between Hitachi and Chartered Semiconductor that has a history of making microcontrollers for automotive applications, Nomura said. Nomura added that Renesas inventories were about twice as high as expected but that it is not clear if, or how quickly, production could be transferred to other fabs or whether this would be acceptable to automotive OEMs.

And given that foundries have been running production at about 90 percent of manufacturing capacity for several quarters, any switching of wafer fab output in favor of Renesas' requirements is likely to be at the expense of other foundry customers.

"The earthquake’s impact on microcontrollers is severe," Nomura analysts had told clients in a note issued Friday (March 18), although global automotive production may be limited by other shortages such as that of a specific airflow sensor made by a Hitachi factory that has been out of action since the earthquake.

In addition automotive qualification procedures are strict and would normally be specific to a manufacturing site. Transfer of manufacturing to another site would normally require a lengthy requalification.