Taiwan’s Covid-19 epidemic spreads to chip companies

June 8, 2021
1:16 am

Justice News Flash Report

Taiwan’s Covid-19 epidemic spreads to chip companies

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According to the company and analysts, the spread of Covid-19 to electronics factories in Taiwan is likely to delay semiconductor shipments, which increases the possibility of re-interruption in industries that are in short supply globally.

The country is seen as the key to the world’s chip supply chain and is suffering from its The first large-scale coronavirus outbreak. It’s in Escalating warning Regarding the depth of the semiconductor shortage, this has affected everything from automobiles to consumer electronics.

The chip testing and packaging company Jingyuan Electronics said on Monday that it expects the outbreak of the employee to reduce its June output and revenue by as much as 35%. Among KYEC’s 7,300 employees, 238 were confirmed to be infected with Covid-19.

The outbreak of migrant workers in Taiwan also hit chip packager Greatek, telecommunications equipment maker Accton and Foxsemicon, the latter is a semiconductor equipment manufacturer affiliated with Apple supplier Foxconn.

Taiwan reported 214 new Covid-19 cases on Tuesday, of which 211 were spread locally and 26 died. Since the beginning of the pandemic, the country has recorded more than 11,000 cases and 260 deaths.

KYEC and Foxsemicon each closed a factory for two days of disinfection. All four companies are testing all their employees. This work is expected to find more infected people.

“The supply market is already under tremendous pressure. We already have four months of delivery time for Taiwan chip orders, so further reduction in supply capacity will exacerbate the current shortage,” said supplier Olaf Schatteman. Consulting company Bain’s chain experts.

KYEC and similar test and packaged chips produced by contract manufacturers, such as TSMCThese are the last steps in the complex manufacturing process before the chips are shipped to the company that designed them.

KYEC’s customers include MediaTek, one of the world’s largest chip design companies, selling semiconductors used in electronic products ranging from smartphones to TVs.

Analysts said that KYEC and Greatek’s customers have little choice to protect themselves from delivery delays because other testing and packaging companies, such as the global industry leader Advanced Semiconductor Engineering, are already operating at full capacity.

Bernstein chip analyst Mark Li said that the interruption may be short-term. “My guess is that it will mainly hurt smaller chip design companies because it prioritizes large customers,” he said, adding that, despite KYEC’s problems, MediaTek has reiterated its revenue target for the second quarter.

In the rest of the chip supply chain, the risk of infection interruption production is considered to be much lower because these stages are much less labor-intensive than packaging, which allows companies such as TSMC and MediaTek to implement work arrangements that keep their distance from society.

But analysts said that it is not yet clear whether the measures taken by Taiwan’s health authorities are sufficient to prevent the spread of Covid-19 in electronics factories.

According to Taiwan’s Central Epidemic Command Center, migrant workers from the affected factories live in the same dormitory.

“The same thing happened to Singapore, I don’t know if there are any lessons that can be learned,” said Patrick Chen, director of Taiwan research at CLSA, a brokerage firm. “They need to improve the living conditions of migrant workers. ”

According to government statistics, there are 713,000 migrant workers in Taiwan and at least 50,000 undocumented immigrants. Nearly 470,000 people work in the industrial sector, many of whom live in factories or nearby dormitories.

The law requires employers to provide accommodation and food for migrant workers, and most of them outsource these services to brokers who pack large numbers of workers into shared rooms.

Although the government has installed rapid testing stations in major technology industrial parks and quarantined those who tested positive, health authorities are working to improve the narrow living conditions of migrant workers who have not tested positive.