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Semiconductors

Chip shortage forces Panasonic to cut output of home solar panel part

Renesas fire disrupts supply of semiconductors for power conditioners

Panasonic is the leading supplier of power conditioners for home solar cells in Japan. (Photo by Koji Uema)

OSAKA/TOKYO -- Panasonic will soon halt production of a key component for rooftop solar cells due to the global supply crunch for semiconductors.

In late June, Panasonic sent client companies a notice that supplies will be delayed for power conditioners used in residential solar systems. The electronics giant is expected to suspend production for a number of products starting as soon as this month.

These changes stem from the March fire at a chip plant run by Renesas Electronics, which disrupted the procurement of semiconductors for power conditioners. Although production of the devices is expected to return to normal by next January, output is seen falling as much as 20% to 30% in the interim.

A power conditioner is a type of power inverter that modulates solar electricity into energy that can be used in households. Based on inverter capacity, about 6.8 gigawatts worth of the power conditioners were sold in Japan last year, according to Tokyo consultancy RTS. China's Huawei Technologies, which is strong in large solar farms, holds the biggest share of the devices at 20%.

The residential market occupies around 30% of power conditioners based on inverter capacity, according to estimates, but a home solar system requires more units of the component.

With a roughly 30% share, Panasonic is the leading supplier of power conditioners for home solar cells, followed by the likes of Japanese compatriots Omron and Tabuchi Electric.

Renesas's semiconductors are evidently being used in a portion of Tabuchi's power conditioners. "They will be hard to replace," said a Tabuchi representative.

Tabuchi will maintain production by tapping its inventory. But with inventories low for some other electronic products, the company has informed clients that supplies may be delayed.

Omron has not disclosed specifics of how its business has been impacted, though it did say it is feeling the effects of the "global semiconductor shortage."

Semiconductor production at Renesas recovered to pre-fire levels on June 24, but deliveries have yet to return to previous volumes and it appears that supplies are being prioritized for the automotive industry.

Although solar-cell makers and housing companies are moving to secure replacement products, that switch will take time since a substitute needs to be tested and certified for durability.

"Procurement costs are going up as companies compete with each other," said an executive at a construction company.

Delta Electronics, a Taiwanese power conditioner supplier, says it is seeing demand from Japanese manufacturers, likely due to the search for replacement products.

The fallout from the chip crunch has hit a variety of end products. Apart from automobiles, production has slowed on a wide range of consumer goods, including car navigation systems, air conditioners and televisions. This trend has clouded prospects for consumer spending amid the coronavirus epidemic.

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