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Japan’s Nidec to Streamline Chip Purchases Amid Supply Woes

The decision to centralize procurement is a sign that chip shortages may persist and are forcing companies to implement more aggressive measures

Nidec Corp's logo
Nidec Corp's logo is seen at an earnings results news conference in Tokyo, Japan, on July 25, 2018. File photo: Kim Kyung-Hoon, Reuters.


Japanese electric motor maker Nidec Corp said it plans to streamline group semiconductor purchases into a single procurement unit to cement its relationship with chip makers and ensure the sourcing of key components amid a supply crunch.

“The chip industry environment is more uncertain than it has ever been,” said Ryuji Omura, deputy chief technology officer of Nidec, makes motors for electric vehicles, household appliances and other products.

The company’s decision to centralize procurement is a sign that chip shortages, which have affected automakers in particular, may persist and are forcing companies to implement more aggressive measures to ensure they have enough components to meet demand for their products and devices.

Toyota Motor Corp, the world’s biggest carmaker by volume, cut its global production plan this month by 100,000 vehicles because of chip shortages and other pandemic-related disruptions.

Denso Corp, one of Toyota’s key parts suppliers, in February agreed to buy a 10% stake in a semiconductor plant being built in Japan by Taiwan Semiconductor Manufacturing Co to help secure supply of microcontroller chips.

Omura said that, as part of its “make or buy” procurement strategy, Nidec would also work more closely with suppliers in chip design and production. He spoke during a presentation on the company’s new chip strategy.

The company is expanding production of energy saving e-axle electric-vehicle motors in a bid to capture as much as 45% of the expanding global market by 2030.


  • Reuters with additional editing by Sean OMeara





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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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