Chip shortages expected to worsen as Texas fabs struggle to restart production

midian182

Posts: 6,648   +59
Staff member
TL;DR: Just when you thought the global semiconductor shortage couldn't get any worse, we're now hearing that the winter storm in Texas last month has left chip makers in the area dealing with the consequences of temporarily shutting down their fabs. It will take several weeks before production can restart, exacerbating the ongoing industry problems and possibly leading to more price hikes for some products.

As reported by Reuters, Samsung, NXP Semiconductors, and Infineon Technologies were all ordered to close their factories in Austin, Texas, last month so power could be prioritized for people's homes, a result of the winter storm that killed at least 21 people.

As we've seen in the past, even the slightest disruption in a fabrication plant's power can have far-reaching consequences, given the time and money required to restart manufacturing.

"Chipmakers now have the power, water, and gas they need to operate, but they need time to restart tools and clean the factories," said Edward Latson, CEO of the Austin Regional Manufacturers Association.

Samsung confirmed that it "may require more time to reach normal levels as we inspect and reconfigure the facility."

Latson warned that the automotive industry, one of those hit hardest by the chip shortages, will feel the shutdown's effects in around five months. The Austin fabs count automakers among their customers.

"The impact is almost immediate, as the chip inventories are low and customers need them as soon as possible," he said. "We are now looking at about one month of lost production."

Samsung's factory makes chips for its own LSI division, Tesla, and Qualcomm. While these customers could turn to other fabs for their chips, that's easier said than done right now. There's a lengthy backlog as plants struggle to fulfil orders, and any excess capacity costs a premium—TSMC auctioned off its excess wafer capacity at 15 – 20 percent more than usual.

Central image credit: Roschetzky Photography

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Manuel Diego

Posts: 84   +150
Seems that things are getting better, because from now on there are "Potential price hikes incoming": that's better than the confirmed price hikes we have now...
 

Kosmoz

Posts: 143   +225
Yeah, and the only thing better than price hikes and shortages is increase price hikes and more shortages. Yay! /s