Malaysia is a major country for the packaging and testing and a passive component producer in the global semiconductor supply chain. However, some chip factories are “paralyzed” under the pandemic, which will worsen the current chip shortage problem. He Xiaopeng, founder of Xpeng, expressed his concern about the lack of semiconductor chips when he commented the above statements.
On August 17, Xu Daquan, Executive Vice President of Bosch (China) Investment, posted on his Moments that, since the pandemic situation in Malaysia is becoming increasingly worse, a semiconductor chip supplier’s factory in Muar, Malaysia, which has been closed for weeks, was once again asked by the local government to keep some production lines closed until August 21. This will directly affect the production of Bosch’s ESP/IPB, VCU, TCU and other types of chips. The supply is expected to be cut off for the rest of the month of August. More than 3000 workers in the Muar factory have been affected by this recent work outage.
More than 50 semiconductor producers have factories in Malaysia, including international semiconductor giants such as Intel, Infineon, NXP and Texas Instruments. The local packaging and testing capacity accounts for about 13% of global total capacity.
Malaysia is now facing the most severe situation since the outbreak of the COVID-19 pandemic. The country has implemented overall movement control order since June 1, and only the semiconductor industry with its high output value has seen relatively few restrictions compared to other industries.
FIRSTNAME Ploss, CEO of Infineon, said earlier this month that, in the case of tight supply, any additional restrictions like those in Malaysia will only further impact production. The company is struggling to upgrade the overall value chain.
Wu Yutian, COO of the global leader in packaging and testing for ASE Technology Holding, also predicted at their latest financial report meeting in late July, that the earliest balance between supply and demand in the packaging and testing industry will be sometime in 2023, and the company may continue to raise the price of the whole product line. Wu revealed that many customers have extended their long-term service agreements from 2022 to 2023.
According to the data of AutoForecast Solutions, the loss of automobile production caused by chip shortages worldwide has reached 5.853 million vehicles as of August 9, and the loss in China has reached 1.122 million vehicles. AutoForecast Solutions has predicted that the final loss of global automobile production for the whole year may further rise to 7 million vehicles.
In addition to the automobile industry chain, many other industries will be affected by the continuous waves of pandemic troubles in Malaysia, with consumer electronics industries such as mobile phones bearing the brunt of the disruption.
Apple is expected to launch new products in the third quarter of this year but its suppliers, such as Murata, Taiyo Yuden and Kyocera, who supply some of the components for the company’s iPhone and Macbook Pro lineups, will gradually ramp up production in the third and fourth quarters. However, due to the extension of the National Movement Control Order (MCO3.0) by the Malaysian government, the global passive component market supply will continue to face challenges.