SAN JOSE, Calif (Reuters) – Japanese semiconductor maker Renesas Electronics Corp. has no plans to build chip factories in the United States and will continue to expand production in Japan instead, chief executive officer Hidetoshi Shibata said on Wednesday.
“When it comes to front-end production, I don’t necessarily believe there are good supplies of ingredients in geographies like Europe or the U.S.,” said Shibata. He was speaking to Reuters in Silicon Valley after meeting with employees of U.S. chip companies that Renesas had acquired in recent years.
Front-end production is the process of creating chips on wafers, round shiny plates of silicon. They are then sent for packaging, often in black plastic casings.
While keeping manufacturing focused in Japan presented risks, with earthquakes sometimes disrupting production, Shibata said Renesas was investing in technologies to cope with challenges from natural disasters. Also, it would keep a stock of chips that it could supply to customers in case of stoppages.
Renesas said in May it would invest 90 billion yen ($650 million) in its previously closed Kofu factory in Japan, revamping it to build power chips – semiconductors that manage electricity.
That expansion is to meet surging demand for electric vehicles. Renesas, whose shareholders include Toyota Motor Corp and automotive supplier Denso Corp, is a major chip supplier for the automotive industry.
Shibata said that, while at a macro level there was “sufficient capacity worldwide to cope with all the demand,” there were still areas of sharp shortages in power management chips and some analog and mixed-signal (analog and digital) chips with larger transistors.
Generally, the smaller the transistors, the faster and more powerful a chip will be. While the latest smartphones have chips with 5 nanometer transistors, the automotive industry uses more mature technology, often 40 nanometers or larger.
Shibata said Renesas’s manufacturing expansion would stick with 40-nanometer or larger technology to meet that demand.
Still, the company continued to design chips that were close to the latest technologies, he said, and its automotive customers were “sampling” its first 7 nanometer chip. But it is made by other chip manufacturers.