The Global Logistics Logjam Shifts to Shenzhen From Suez
Outbreak at one of the world’s busiest ports leads to global shipping delays; infections in chip supply
chain worsen global shortage
By Stella Yifan Xie in Hong Kong, Costas Paris in New York and Stephanie Yang in Taipei
The Wall Street Journal
have been grappling with their own workplace outbreaks, according to officials in Taiwan’s Miaoli county, where the recent clusters have been concentrated. Taiwan Semiconductor Manufacturing Co. , which alone accounts for 92% of the output of the world’s most sophisticated chips, says it has not yet been impacted, but the outbreak is happening next door to its headquarters in Hsinchu, Taiwan. Given the already crippling global shortfall in the chip industry, the outbreaks in Taiwan’s tech sector “of course…will worsen the shortages,” says Brady Wang, a semiconductor analyst at Counterpoint Research. Malaysia, home to a number of foreign-owned factories involved in chip making and producing capacitors, resistors and other key modules used in consumer electronics and cars, has also seen its production activity snarled by a wave of Covid-19 cases. Infineon Technologies AG , a German semiconductor manufacturer with two factories a precaution.
All told, the Malaysia Semiconductor Industry Association says the lockdown will reduce output by between 15% and 40%.
“It will disrupt the supply chain, somewhere, somehow,” said Wong Siew Hai, the group’s president.
The semiconductor shortage has trickled down to small businesses, who are feeling the impact of slower deliveries and higher prices.
“I got three cars with electrical problems and the parts are back-ordered with no release date,” said Hector Martinez, who runs Rye Auto Care in Rye, N.Y. “Everything that has to do with electronic ance unit in Beijing. But the latest port disruptions risk spilling over into higher consumer prices around the world.
The outbreak in Shenzhen’s home province of Guangdong, China’s most populous, which is responsible for roughly a tenth of the country’s economic output, has pushed some manufacturers there to raise prices and even temporarily halt production to avoid further erosion to their profit margins.
“It’s quite terrifying,” said Zhu Guojin, a consultant at logistics firm Jizhi Supply Chain Service Yiwu Co. “This is the first time that we’ve seen a decline in port capacity