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Semiconductor shortages

Natural disasters further tighten global chip supply

By Feb 17, 2021 (Gmt+09:00)

Natural disasters further tighten global chip supply
A severe cold snap in the US has taken another heavy toll on the global semiconductor industry, already reeling from tight supply exacerbated by a strong earthquake in Japan and a fire at a Taiwanese chip plant earlier this month.

The chip plants forced to shut down due to the natural disasters include production lines for automotive chips, which have been in severe shortage of supply.

Samsung Electronics' foundry plant in Austin, Texas has been shut down since 4 pm local time on Feb. 16 due to power outages caused by a severe winter storm, according to the company on Feb. 17. The Austin plant runs 14-nanometer and 28-nanometer production lines, and supplies chips to Intel, Tesla, Xilinx and IBM.

Samsung is one of the major industrial companies that were ordered by Austin Energy to idle or halt their operations due to the electricity cutoff. The power utility shut off power to major industrial users after a massive snowstorm hit a large part of the US, according to the Austin American-Statesman on Feb. 16.

NXP Semiconductors and Infineon Semiconductors were among the semiconductor manufacturers ordered to shut down their factories in Austin because of the power failure. NXP is the world’s No. 1 automotive chipmaker, producing microcontrollers and sensors.

Power blackouts bring production lines to an abrupt halt, resulting in the need to discard some wafers on the production lines. Back in 2018, Samsung halted operations at its chip plant in Pyeongtaek in South Korea for 30 minutes due to a power failure caused by a fire, and then had to discard all wafers on the production lines at the time. The incident incurred about 50 billion won ($45 million) in lost production.

But a Samsung Electronics official said it had already been notified of the blackout by Austin Energy before shutting down its Austin factory this week. Thus the company had time to prepare for the shutdown, which ended up with no significant damage to the company.

But if the cold spell continues for much longer, Samsung and other chip plants in Austin may incur additional losses from delayed shipments and the restoration of production lines.


The 7.3-magnitude earthquake that hit Japan’s northeast coast on Feb. 13 has worsened shortages of semiconductor chips. Renesas Electronics Corp., the world’s third-largest automotive chipmaker, shut down its Naka factory for two days from Feb. 14, before resuming operations on Tuesday.

Shin-etsu Chemical, which fabricates silicon wafers used for semiconductor chips, was also hit by the earthquake and halted its Shirakawa plant on Feb. 14. It is preparing to resume production.

In Taiwan, a fire broke out on Feb. 5 at Unimicron Technology Corp.'s plant. It was the second fire for the leading manufacturer of ajinomoto build-up film (ABF) substrates since the October outbreak last year.

ABF substrates are used to connect chips to the mainboard and are likely to remain in tight supply for more than six months.

The fire at the Unimicron plant will also likely affect the shipments of central processing units (CPUs) and smartphone application processors for which ABF substrates are essential materials.

“The natural disasters happened at a time when chip manufacturers were striving to boost production. The damage won’t be negligible,” said a semiconductor industry source.

Demand for chips from electronics firms to automakers has picked up alongside the growing popularity of 5G phones, smart cars running on system semiconductors and artificial intelligence-applied gadgets.

Write to Jeong-Soo Hwang at

Yeonhee Kim edited this article.

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