SOURCE / COMPANIES
Chinese chip firms temporarily halt production due to nationwide power curbs
Published: Sep 28, 2021 03:23 AM
Workers are busy at a chip factory in Suqian, East China's Jiangsu Province in July 2021. Photo: cnsphoto
Workers are busy at a chip factory in Suqian, East China's Jiangsu Province in July 2021. Photo: cnsphoto


A number of chip enterprises in China have halted production temporarily, including suppliers of semiconductors for foreign companies, amid a severe nationwide power shortage due to soaring coal prices and policies to reduce energy consumption.

CWTC, a semiconductor packaging material supplier for NXP and Infineon Technologies, released a notice on Sunday saying that its factory in Suzhou, Jiangsu had suspended semiconductor production from September 26 to 30, in accordance with the local policy on power reduction.

ASE Kunshan, a semiconductor production company based in Kunshan, East China's Jiangsu Province, said on Sunday that the firm had received a notice from local authorities about power cuts from September 27 to 30. The factory will have no output during the period.

ESON, another chip production firm, said on Sunday that its factory in Kunshan had halted production from September 26 to 30 due to the power cuts. During the five-day suspension, the company will maintain operations related to inventory, and will arrange production during holidays in order to meet customers' shipment demand.

Many industry observers said the production suspension will escalate global chip shortages, further increasing chip prices.

"The price will stay stable in the short term because the producers have enough inventory to meet the shipment demand, although power curbs will aggravate the shortage of semiconductor chips," Ma Jihua, a veteran industry analyst, told the Global Times on Monday. 

In August, the waiting time for chip delivery rose to 21 weeks, six days more than in July, according to a report released by Susquehanna Financial Group, a market analysis agency.

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