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Japan’s Renesas to partially halt chip production for two months on China slowdown: source

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Japan's Renesas to partially halt chip production for two months on China slowdown: source

FILE PHOTO: Renesas Electronics Corp’s logo is seen on its product at the company’s conference in Tokyo, Japan, April 11, 2017. REUTERS/Toru Hanai

TOKYO (Reuters) – Automotive chipmaker Renesas Electronics Corp plans to halt production at six plants in Japan for a total of up to two months this year as it braces for a further slowdown in Chinese demand, a person briefed on the matter said on Wednesday.

The company will halt most of the operations at the plants for month around May and again for a month around August to avoid excessive chip inventories amid uncertainties stemming from Sino-U.S. trade frictions, the person said.

Renesas expects chip demand for autos, machine tools and air conditioners to slip further this year, said the source, who declined to be identified as the plan has not been officially announced.

No one was immediately available for comment at Renesas.

Production at four plants in China and Malaysia may be also temporarily suspended depending on demand, the source said.

The plans were first reported by the Nikkei business daily.

Earlier on Wednesday, Hyundai Motor Co said it is considering plans to suspend production at its oldest plant in China, as the South Korean carmaker reels from tumbling sales and massive overcapacity in its biggest market.

China’s car sales contracted for the first time since the 1990s last year, hit by a weakening economy and the fallout of trade frictions with the United States.

Reporting by Makiko Yamazaki; Editing by David Dolan

Our Standards:The Thomson Reuters Trust Principles.

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