Chip shortage exacerbated by COVID-19 spread in Malaysia | Technique

The number of COVID-19 cases is increasing in Malaysia, threatening to exacerbate shortages of semiconductors and other components that have plagued automakers for months.

Historically, the Southeast Asian country has not had the kind of importance to supply chains that Taiwan, South Korea, or Japan have. But in recent years, Malaysia It emerged as a major center for packaging and testing of chips, and is among the major vendors operating there Infineon Technologies AGAnd NXP Semiconductor NV And STMicroelectronics NV.

Now the infection COVID-19 It is skyrocketing in the country, jeopardizing plans to lift the blockade and restore full production capacity. The average daily new cases reported over a seven-day period exceeded 20,000, compared to just over 5,000 at the end of June.

Ford Motor Company Last week, it said it was temporarily suspending production of its popular F-150 truck at a US plant due to “…Shortage of semiconductor related parts as a result of the COVID-19 pandemic in Malaysia“.

The country’s authorities are moving quickly to tackle the outbreak and have granted waivers to some manufacturers in a bid to keep the economy on track.

Companies were allowed to continue working with 60% of their workforce during the June shutdown and will be able to return to 100% when more than 80% of their workers are fully vaccinated. On August 23, the number of reported infections dropped to 17,672.

But the situation is still volatile. Factories must shut down completely for two weeks if more than three employees contract COVID-19, under unofficial guidelines. The delta variant has proven to be particularly contagious and difficult to stop.

The situation could exacerbate the shortage of semiconductors, which has already reached crisis levels. Chip delivery times — the gap between ordering a semiconductor and receiving a delivery — increased more than eight days in July to 20.2 weeks from the previous month, according to research by Susquehanna Financial Group.

The June number already had the longest waiting time since the company began tracking data in 2017.

Toyota Motor Corporation. It said last week it would suspend production at 14 plants because suppliers, particularly in Southeast Asia, were hit by new infections and shutdowns.