Texas storm forced some chip manufacturers to cut production, or exacerbated supply shortages

Texas storm forced some chip manufacturers to cut production, or exacerbated supply shortages

 

Bad weather in most parts of the United States has caused some semiconductor companies to idle production capacity, which may exacerbate the chip shortage that has forced automakers to reduce production in some factories.

Bad weather in most parts of the United States has caused some semiconductor companies to idle production capacity, which may exacerbate the chip shortage that has forced automakers to reduce production in some factories.

South Korea’s Samsung Electronics Co. (005930.SE), one of the world’s largest chipmakers, operates two factories in Austin, Texas. A spokesperson for the company said that the local government had requested the temporary closure of the two factories on Tuesday. The spokesperson said that Samsung expects to resume production as soon as possible, but is still waiting for the power company Austin Energy to provide guidance on when the chip maker can resume plant operations.

Beginning early Monday, Texas suffered widespread power outages due to a severe winter storm. The power outage prompted local officials to demand that companies reduce operations to minimize demand on the region’s power grid.

Citi analysts said that Samsung Electronics’ two Austin plants account for approximately 28% of the company’s total production.

Winter storms hit many parts of the southern United States, causing continuous snow and freezing rain. According to the Associated Press, at least 30 people died this week due to extreme weather. As the cold air moves to the east coast of the United States, millions of people face water and power cuts for the third consecutive day. In some cities in Texas, residents braved the cold to queue for hours to buy food, and some residents’ houses and vehicles were damaged by the disaster.

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