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Samsung ordered to shut down two chip factories in the US
According to the resource Austin-American Statesman, Samsung was ordered to completely shut down two factories in Austin due to a lack of electricity in the state of Texas. NXP Semiconductors and Infineon Semiconductors factories and many other manufacturers also faced such an unprecedented demand.
In the American states of Texas, Oregon and Virginia, more than 1.8 million consumers were disconnected from the power supply due to uncharacteristically low air temperatures for these territories. Explained that about half of wind turbines in Texas were out of operation due to icing amid record winter electricity consumption. The state utility company Austin Energy, which supplies electricity to Austin, Texas, and the surrounding area, has ordered all semiconductor manufacturers and manufacturers to suspend or completely shut down their factories.
Such unplanned outages of production lines can have long-term consequences. For example, a thirty-minute power outage at one of Samsung’s factories in 20221 resulted in a 3% shortage of NAND flash chip shipments in the global market at the end of the year. Samsung was already experiencing power problems at its factory in the South Korean city of Hwaseong earlier this year, according to sources. It took several days to restore the power supply and resume the production lines of the company.
As the Austin-American Statesman points out, due to blackouts at factories in Austin, some of the products produced there were unusable, as a result of which the company’s losses could be estimated at millions of dollars. It is noted that for the release of some types of microcircuits, multi-stage production is required, which can take up to a month or even more. At the moment, it is not known whether the company received notifications about the upcoming blackout in advance in order to be able to minimize possible losses and at the same time prepare for the resumption of normal operation of the factories after the restoration of the electricity supply.
In the past, even short-term interruptions in chip production have led to price hikes and chip shortages. There is still a shortage of chips on the world market. The shutdown of Samsung factories is likely to make this problem worse. Typically, microcircuit factories are equipped with backup generators to compensate for power shortages during unplanned outages. However, such systems are not designed for long-term operation.
Samsung built the first chip factory in Austin in 1996. In 2021, a second factory was erected there, which the company modernized and expanded in 20021. The company’s open data does not indicate which products have so far been produced in these factories, however, historically, Samsung has produced DRAM memory modules, NAND flash memory, and mobile processors at these factories.
It is noteworthy that at the moment the company is at the stage of considering the start of construction of a new factory for the production of microcircuits in the United States worth $ 17 billion. Texas, Arizona and New York State are likely to be built. The choice of location will primarily be influenced by access to reliable energy and water infrastructure.