The surge in Covid in Southeast Asia is the latest blow to global chip supply


The key technology supply chain in Southeast Asia has been hit by record levels of Covid-19 infection, a development that may exacerbate global chip shortages.

The two economies of Malaysia and Vietnam play a key role in the production of electronic products and packaging and testing components in various fields from cars to smartphones. They are facing The worst outbreak Since the beginning of the epidemic.

This situation may further squeeze the global technology supply chain, especially products that require semiconductors.The chip industry suffers Global shortage And the surge in demand due to the lockdown restricting people to their homes.

Gokul Hariharan, co-head of Asia Technology, Media and Telecommunications Research at JPMorgan Chase, said that Southeast Asia plays an important role in manufacturing passive components, including resistors and capacitors used in smartphones and other products. According to the bank, about 15% to 20% of the world’s passive components are manufactured in this region.

Hariharan said: “It hasn’t reached the stage to stop it, but it needs to be monitored because it gradually gets worse.”

More than 50 international chip suppliers operate manufacturing plants in Malaysia, which is also home to many semiconductor packaging and testing facilities.The country recently implemented Fourth blockade Because it reports continuous daily records of coronavirus cases.

Health workers collect coronavirus swab samples in Hanoi. Vietnam recently reported a record daily increase in the number of infections © AFP via Getty Images

One affected company is Taiyo, a Japanese manufacturer of multilayer ceramic capacitors used in components in electronic applications ranging from smartphones to automobiles.

According to its Taiwanese parent company, Kaimei Electronics, Ralec, a supplier of electronic components called resistors, predicts that its production capacity in July will drop by 30%.

Although most areas of Malaysia’s main peninsula are under strict lockdown, a large number of semiconductor-related companies have been exempted, allowing them to operate at 60% of their staff capacity.

According to analysts, passive component manufacturers Epson, NDK and Yageo have all received such approvals, as did Advanced Semiconductor Engineering, the world’s largest chip testing and packaging company.

“This [approval] It happened much faster than in late March last year,” said Forrest Chen, an analyst at Trendforce, a Taiwanese electronics research group.

“With a 60% operating rate, Taiyo can maintain a capacity utilization rate of 80% to 85%,” Chen added. Orders were also transferred to other Japanese capacitor manufacturers, such as Murata and Kyocera, and TDK’s auto parts.

But Chen said that even the highly automated parts of the semiconductor industry could suffer from weeks of delays in shipments due to the lockdown.

The region is also an important hub for important parts of the production process of technology companies, such as testing and packaging. Bernstein analyst Mark Li said that due to the labor-intensive nature of such services, the lockdown restrictions are worrisome.

He said that factories in Thailand and the Philippines are also experiencing large-scale epidemics and strict restrictions, and these services are also provided.

In Vietnam, one of the world’s largest exporters of electronic products, authorities reported that the number of new coronavirus infections reached a record high over the weekend, most of which occurred in the country’s largest urban center, Ho Chi Minh City. The provinces surrounding Hanoi, the capital, which has electronic facilities, have also been hit.

Samsung was forced to cut the production of a large consumer electronics factory in Ho Chi Minh City last week after the previous outbreak triggered a request for the Vietnamese government to find shelters for thousands of workers in industrial parks.

According to people familiar with the matter, the South Korean Technology Group, one of the largest employers in Vietnam, has been negotiating with the government on this matter.

But the world’s largest manufacturer of memory chips, smartphones and electronic displays Has not yet anticipated a severe financial blow From interrupt. Samsung’s other factories in Vietnam that produce and assemble smartphones are still online.

Additional report by Edward White and Song Jung-a in Seoul

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