Samsung Chip Production Returns to Near-Normal Levels in Texas

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Samsung Electronics mentioned on Tuesday that manufacturing at its US chip plant at Austin, Texas had returned to near-normal ranges as of final week after greater than a month of disruption that exacerbated a worldwide chip capability crunch.

Samsung and different chipmakers with manufacturing amenities within the space had seen shutdowns as a result of extreme climate on February 16.

Samsung declined to touch upon when manufacturing can be absolutely again to regular.

The disruption may have a particular affect on the worldwide chip contract manufacturing trade that’s already battling a extreme capability crunch, analysis supplier TrendForce has mentioned.

Qualcomm 5G radio frequency chips and Samsung show and picture sensor chips account for about 65 p.c of the month-to-month manufacturing on the Samsung plant, TrendForce added.

Different chips embrace energy administration built-in circuits (PMICs) and a small quantity of chips that management electrical components, Seoul-based analysts mentioned.

The disruption is anticipated to harm manufacturing of smartphones globally over the April to June interval by about 5 p.c and will decrease this yr’s penetration charge of 5G smartphones, TrendForce estimated.

“This was an issue as a result of it exacerbated a worldwide foundry capability scarcity. However at the very least it will not worsen as manufacturing resumes,” mentioned Park Sung-soon, analyst at Cape Funding & Securities.

“Smartphone makers have chip stockpiles, however as a result of distributors’ inventories of smartphone units are at the moment low, smartphone manufacturing might even see some affect from the plant’s shutdown within the second half of this yr.”

Analysts have estimated losses from the disruption on the plant at round KRW 300 billion (roughly Rs. 1,950 crore) – KRW 400 billion (roughly Rs. 2,600 crore), which they anticipated Samsung to principally mirror in its January-March quarter earnings, to be introduced in April.

Earlier this month, NXP Semiconductors NV mentioned it anticipated an affect of about $100 million (roughly Rs. 735 crore) of income from its Texas manufacturing shutdown.

German chipmaker Infineon mentioned it anticipated a quarterly hit to revenues within the excessive double-digit million euro vary from its Texas plant outage.

© Thomson Reuters 2021


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