Samsung’s chip production is returning to near-normal levels in Texas

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Samsung Electronics said on Tuesday that production at the US chip factory in Austin, Texas, had returned to near-normal levels from last week after a break of more than a month, exacerbating the global crisis in chip capacity.

Samsung and other chip makers with production facilities in the area were suspended due to severe weather on February 16th.

Samsung declined to comment on when production will be completely normal.

The outage will have a definite impact on the global chip contract industry, which is already struggling with a serious capacity crisis, said research provider TrendForce.

Qualcomm 5G radio chips and Samsung display and image sensor chips account for about 65 percent of monthly production at Samsung’s plant, TrendForce added.

Other chips include integrated power management circuits (PMICs) and a small number of chips that control electrical parts, analysts in Seoul say.

The downturn is expected to damage global smartphone production between April and June by about 5% and could reduce this year’s penetration rate of 5G smartphones, according to TrendForce.

“It was a problem because it exacerbated the shortage of foundry capacity worldwide. But at least it won’t get worse with the resumption of production,” said Park Sung-soon, an analyst at Cape Investment & Securities.

“Smartphone makers have stocks of chips, but as stocks of vendor smartphone kits are currently low, smartphone makers may see some impact from shutting down the plant in the second half of this year.”

Analysts estimate the plant’s downtime losses to be around KRW 300 billion (approximately 1,950 kroner) – KRW 400 billion (approximately 2,600 crore), which Samsung said will reflect most of its profit for the quarter from January to March. will be announced in April.

Earlier this month, NXP Semiconductors NV said it expected an impact of about $ 100 million (approximately 735 crores) in revenue from the shutdown in Texas.

German chip maker Infineon has said it expects a three-month revenue blow in the high double-digit range of millions of euros from the shutdown of the Texas plant.

© Thomson Reuters 2021

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