UPDATE 1-Japan's Renesas: chip supplies to recover by end-Oct

Tue May 10, 2011 10:33pm EDT

* To return to prequake supply levels by end-October

* Naka plant restart moved forward to early June from June 15

* Renesas is key auto sector supplier, seen as vital supply chain link (Adds details, background, share price)

TOKYO, May 11 (Reuters) - Japan's Renesas Electronics Corp , a major supplier of automotive chips, said on Wednesday that its semiconductor shipments would recover by the end of October to levels seen before a massive March 11 earthquake and tsunami disrupted global auto production.

Renesas, which supplies Toyota Motor Corp and others, said it would begin chip production at its Naka factory in eastern Japan's Ibaraki prefecture by early June, moved forward from its previously announced June 15.

Those chips will start reaching customers from the end of August, it said. The company had previously given guidance on production but not on shipments, which follow the packaging process.

Renesas, the world's No.5 chipmaker, has been closely watched to gauge how quickly Japan's automotive sector will resolve supply issues that have cut production at many domestic manufacturers to half their planned volumes.

Toyota and rival Honda Motor Co are struggling to overcome a widespread parts shortage in the wake of the March 11 earthquake, which is benefiting overseas rivals such as General Motors .

Toyota has said it expected full normalisation of output by November or December. The Nikkei business newspaper said on Tuesday that the automaker's production would return to normal two or three months earlier than that, but Toyota denied the report.

Shares at Renesas fell 2.8 percent to 736 yen, against a 0.2 percent rise in Tokyo's electrical machinery subindex . (Reporting by Mayumi Negishi; Editing by Edmund Klamann)

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