Tagged: global chip

Texas Blizzard exacerbates global chip shortage

“the severe weather that hit most parts of the United States has caused some semiconductor companies to idle their production capacity. The Blizzard is expected to aggravate the global chip shortage, and has prompted some automobile manufacturers to reduce the production of some factories.” On February 17 local time, the Wall Street Journal published an article entitled “Texas winter storm hit chip manufacturers, aggravating the supply dilemma”.


The article said the blackout caused by the snowstorm prompted local officials to ask local companies to reduce operations to minimize demand for the region’s power grid. Several high-tech manufacturers around Austin, the state capital, have responded to requests from local energy suppliers to reduce or close operations one after another.


For example, a spokesman for South Korea’s Samsung Electronics, one of the world’s largest chipmakers, said on Tuesday that the local government asked Samsung to close its two factories in Austin, Texas. Samsung hopes to resume production as soon as possible. At present, the factory is still waiting for the local power supplier to inform it to resume production.


Analysts at Citibank said the Austin plant, which accounts for about 28% of Samsung’s total capacity, is Samsung’s manufacturing center. Earlier, Samsung was considering a $17 billion plan to expand its business in Austin or other parts of the United States.


Snowstorms in Texas exacerbate the lack of “core” situation, and the world’s first quarter auto production may be less than 700000


NXP semiconductors NV, a Dutch chip company, and Infineon Technologies AG, a German semiconductor manufacturer, are two major suppliers to the automotive industry, the article said. Among them, in the fourth quarter of last year, NXP’s auto sales reached US $1.19 billion, accounting for about half of the total revenue.

Texas Blizzard exacerbates global chip shortage

On Wednesday, NXP said it had to cut production at two plants in Austin and that “NXP will inform affected customers directly of the possibility of supply disruption.” The company said. According to regulatory documents, as of 2019, NXP’s Austin plant accounted for about 30% of the company’s total plant area.


Infineon, another auto chip supplier, also said it closed its factory in Austin on the 16th after authorities said it would cut off power supply.


Analysts at Citigroup point out that the plant, which mainly produces memory chips vital to the automotive and industrial markets, accounted for about 5% of Infineon’s revenue last year.


The closure comes as many global automakers, including Volkswagen, Ford and general motors, have been forced to cut production because of a global shortage of chips.


According to the forecast of IHS Markit Ltd, a research group, this shortage is expected to reduce the output of the global automobile industry by 700000 vehicles in the first three months of 2021.


The “Forbes” news network pointed out that the extent of extreme weather damage may be far more than that. Restarting these Fabs is not just a matter of recharging.


“The manufacturing process of semiconductor chips is very complex, there are hundreds of steps, almost all of which require precise control of the operating temperature. Manufacturing tools have to stabilize, and it takes time to restart. It will be challenging to avoid some production losses in the process. ” The report said.


In addition, the financial times also pointed out that due to the scale and complexity of the chip business, even a short time to close the factory will cause millions of dollars in losses. And the reduction of chip production will make the global lack of “core” even worse.