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Chip Shortage Getting Worse, Samsung Hit Badly

The industry is suffering an unprecedented shortage of microchips needed for technology such as smartphones, gaming consoles, tablets and TVs, with no end in sight for the production delays.

Global issues such as the US trade dispute with China, the COVID-19 pandemic and power shortages in Texas have exacerbated the stock shortages in semiconductor production facilities.

According to The Korea Herald, engineers from Samsung flew to Austin in Texas to help restart the company’s chip factory, which halted production due to the widespread power outage.

Several other chip making facilities including NXP and Infineon in Texas also stopped operations in the wake of the power outage.

Samsung’s Austin factory alone raised 3.91 trillion won ($3.54 billion) in sales in 2020 and it is the first time the facility has stopped production.

“It is an unprecedented event at any of Samsung’s chip plants,” said a Samsung official.

“The company is in the process of dispatching engineers to help normalize the plant for smooth production of chips afterwards.”

Samsung’s daily losses could hot 100 billion won if the facility is closed for even 10 days.

It’s the latest global crisis which has directly affected chip production for some of the world’s most popular gadgets.

“A perfect storm of coronavirus chaos, trade-war stockpiling, and a paradigm shift in work-from-home devices is causing the chip squeeze,” Neil Mawston, executive director at consultancy Strategy Analytics, told the AFR.

The short supply of chips will also inevitably lead to higher prices – in particular potentially impacting the launch prices of smartphones released in 2021.

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