Fewer semiconductors in China due to mandatory blackouts

Apparently, mandatory power outages in several Chinese provinces have so far caused more problems than initially anticipated. Local authorities in the Chinese provinces of Jiangsu, Zhejiang and Guangdong do not cut the supply of electricity to foundries such as TSMC and UMC as they have continuous production cycles and cannot stop and subsequently restart wafer processing without consequences. Therefore, for now, chip manufacturing in China will not be affected. Additionally, there are other companies that can continue to operate using diesel power generators to achieve their goals. However, the provinces of Jiangsu, Zhejiang and Guangdong are manufacturing centers that have their own supply chains, so if some companies cease operations, others will also be affected as they will not receive the necessary supplies on time.

Second DigiTimes, the giant ASE Technology, which serves virtually all fabless chip designers, including AMD, has reportedly informed its customers that its manufacturing facility in Kunshan will not be able to operate until September 30 due to restrictions. . The announcement caused the company's shares to drop by 2.6% - reports FocusTaiwan. Meanwhile, the company hasn't made any announcements with the Taiwan Stock Exchange, so the impact on its business isn't too significant.

Photo Credit: GlobalWafers As the largest outsourced semiconductor assembly and test company (OSAT), ASE has manufacturing facilities in various countries and regions; therefore, the cessation of operations in Suzhou will affect the customers who are served by them. The company said it would ship products from the facility earlier than expected at the end of last week in an effort to minimize the impact of mandatory power outages on its customers. However, there may be delays. An extra day or two in production may not seem dramatic, but it will cause unpleasant effects in the supply chain, which could lead to serious problems with sea or air freight.

While TSMC and UMC are not directly affected by the cuts in electricity supply, their partners in the region are. GlobalWafers, a wafer supplier, has received orders to stop production - ComputerBase reports. It is not known whether TSMC and UMC will be short of supplies from GlobalWafers or other companies in the region due to power outages.

Hundreds of companies in the three provinces affected by the country's decision to reduce energy consumption and CO2 emissions. Therefore, the short-term effects on the economy and local supply chains are something that has yet to be determined. In the long run, companies will adjust to offset the effects of mandatory temporary energy cuts on their businesses. Some will introduce night shifts on days when the energy supply is unlimited, while others will increase production in different regions.