Renesas Electronics Corp. of Japan announced that it will resume operations at its Beijing chip production on Tuesday after it was shut down due to COVID-19 infections. The plant, whose output was stopped on Friday, primarily makes semiconductors used in commercial equipment and home appliances. The suspension acts as a visible indicator of the crisis’s possible economic ripple effects on foreign producers in China.
The recent increase in COVID instances in China has affected major urban areas, moving quickly to Beijing’s trading floors and Shanghai’s financial district. The still-expanding surge of infections was brought on by China’s this month’s broad relaxation of rigorous COVID control procedures. According to medical experts, China may now pay a price for protecting an aging population with poor vaccination rates and a lack of natural immunity.
One of several major Japanese companies with facilities in China is Renesas, which produces about a third of the microcontroller chips used by automakers worldwide. It also has a facility in Suzhou, a city in eastern China.
Japanese automakers may potentially experience difficulties if there is a disruption in China due to the country’s significant manufacturing presence there.