Nissan abrupt production halt

Nissan abrupt production halt.

TOKYO – Nissan Motor’s unexpected production halt sure looks like the ultimate supply chain screw-up, resulting in nightmares for OEMs.

Nissan’s delay in delivering engine control units (ECUs) also illustrates the market reality that many chips continue to be produced and distributed on an allocation basis.

This dilemma also sounds the alarm for companies who have shifted chip manufacturing to foundry giants like Taiwan Semiconductor Manufacturing Co. whose capacity is maxed out.

Nissan Motor Co. announced here that it is suspending production lines at four of the company’s five domestic assembly plants for three days starting Wednesday, July 14th, because ECUs supplied by Hitachi Ltd. won’t arrive in time.

The abrupt production suspension will cost the Japanese automaker its output of 15,000 cars.

Hitachi, obviously insisting that such glitches will not become habitual, claimed that the ECU delivery delay was caused by a shortage of one of the key ICs used inside its ECU.

While Hitachi is not naming names as to its chip supplier, the Japanese company acknowledged that it’s been dependent on a single source.

It’s not Renesas

One Japanese industry source told EE Times that the said semiconductor supplier for Hitachi’s ECU is “a foreign-based chip vendor.”

Renesas, a Japanese chip vendor originally created by Hitachi’s semiconductor division and that of Mitsubishi, which recently merged with NEC Electronics, offers a broad range of automotive chip solutions including control systems such as powertrains that control exhaust and electric vehicle cores in ECUs. However, a Renesas spokesperson, when contacted, said that their ICs are not used in the Hitachi ECUs supplied to Nissan.

The lack of ECU inventories that has triggered Nissan’s production suspension is an ironic turn of events for a Japanese auto industry that prided itself on “just-in-time” (kanban) system originally developed by Toyota.

Yasuhiko Honda, Hitachi’s executive managing director, said during the Nissan/Hitachi joint press conference: “We were informed by our semiconductor supplier of the sudden decline of a specific IC chip supply. The chip vendor, however, has yet to tell us what’s going on.”

While the executive noted that the tighter supply and demand in the current semiconductor market may have been the issue behind all of this, he added, “We don’t know for sure yet.”

The shortage of the chip has left Hitachi no choice but to delay ECU delivery. Those affected by Hitachi’s ECU in question are Nissan and two other Japanese automakers. Hitachi declined to name the two automakers, but confirmed that a majority of its supply is for Nissan.

Sourcing a specific IC from a single chip vendor is not uncommon among automakers, who are always seeking cost advantages. Nissan claims it will restore its normal production-level next week.

Meanwhile, Toshiyuki Shiga, Nissan’s COO hinted that a problem in procuring an ECU from Hitachi could spread to North America and disrupt production there, reported <i>the Wall Street JournalMi>.

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