Electricity crunch partially affecting semiconductor output in Chongqing
Published: Aug 18, 2022 08:05 PM
chip Photo:VCG

chip Photo:VCG

Semiconductor enterprises in Southwest China's Chongqing city said that they are adjusting production plans to cope with local industrial power cuts that started on Wednesday.

Most research and development ventures told the Global Times they are not affected, with some manufacturers saying they saw a limited impact after the city joined neighboring Sichuan Province to halt some industrial power supplies from Wednesday until August 24, to ensure residential electricity use, as power supply was stretched by recent high temperatures.

Chongqing has attracted a number of well-known integrated circuit enterprises such as SK Hynix, China Resources Microelectronics (CR Micro), and China Electronics Technology Group Corp (CETGC).

SK Hynix told the Global Times on Thursday that operations at its Chongqing subsidiary remain normal.  

"We see no impact from the power restrictions so far," the company said in a message it sent to the Global Times.

CSEMI, a Chongqing-based chip design company, told the Global Times that its power consumption has not been restricted and it sees no impact for the time being.

However, some semiconductor companies said that they are being affected by the power cuts and adjusting production to minimize the impact.

Chongqing Alpha and Omega Semiconductor said that they have adjusted the operation of air conditioning units and suspended some machines to cope with power restrictions.

"We halted some equipment with less importance for production, but other machines are still operating around the clock," a person in charge of the business told the Global Times on Thursday.

"It is expected that a one-week power rationing will have little impact on order delivery," the person said.

Xiang Ligang, an independent tech analyst, said that a few days of power cuts should have a very limited impact on companies as they could adjust production plans to hedge the impact, but a long period of power outage would have negative impact on the production process.

According to him, normally a chip factory with 10 production lines can produce about 30,000 wafers each month. One wafer could generate about 500 chips. That means a plant could produce about 500,000 chips daily. 

Xiang suggested that local governments could put certain important chip producers on a power restriction whitelist based on their contributions to the economy.

He also noted that the power crunch in Sichuan Province should have a limited impact on China's overall semiconductor industry, as chip production capacity is quite scattered and distributed evenly across the country.

There are four main agglomeration zones for the industry - the eastern Yangtze River Delta region, the Beijing-Tianjin-Hebei region, the Guangdong-Hong Kong-Macao Greater Bay Area, and the central and western regions represented by Wuhan, Chengdu and Chongqing. 

Chongqing ranks 13th among the top 15 Chinese mainland cities in terms of integrated circuit competitiveness, according to a recent report released by ChipInsights.

In March, Chongqing issued a plan to further develop emerging industries during the 14th Five-Year Plan (2021-25). In terms of semiconductors, Chongqing  aims at building the country's largest power-related chips base.