Foreign chip plants in Xi’an still running
Samsung, Micron adjust operations, but production continues: insiders
Plants of major foreign chipmakers in Xi’an, capital city of Northwest China’s Shaanxi Province, have continued their daily operations despite a lockdown in the city amid a new wave of COVID- 19 cases, though their production capacity has been reduced somewhat to cope with strict anti- epidemic measures, industry insiders told the Global Times on Thursday.
As a major regional manufacturing and logistics hub, Xi’an has recently been under the global spotlight amid a growing speculation over potential disruptions to the global supply chain. Though minor delays could be seen, the overall impact on the global supply chain will be limited, the insiders said, pointing to the continued operations and China’s ability to rein in outbreaks fast.
Currently, the production capacity of the chip producers in the city have been adjusted, but production will not be fully stopped, given the huge potential costs that may be involved should a suspension occur, an industry insider within the semiconductor industry told the Global Times on Thursday on the condition of anonymity.
Although the production of Samsung’s Xi’an plants are running at lower operating scale after cutting down their production capacity and work under closed loop mode, there have been no substantive interruption in terms of its operation, according to a report that TrendForce, an industry information consulting company, sent to the Global Times.
The South Korean conglomerate’s plants in Xi’an continue to produce on a limited staffing basis, while actively making adjustments to reduce the impact on output, TrendForce said, adding that the supply for raw materials, water and electricity required for production remain at sufficient levels.
Due to the ongoing COVID- 19 situation, Samsung has decided to temporarily adjust operations at their manufacturing facilities in Xi’an, the company stated in its report on Wednesday.
The insider noted that even if the factories such as the ones operated by Samsung halted, its actual impact on the supply chain would be very limited, since the products the factories produce are mostly in the
NAND Flash category, which are adequately available in the market with sufficient inventories and are also produced by multiple companies in China.
US- based chipmaker Micron is also adjusting operations to ensure employee safety while keeping production running.
The city’s anti- epidemic measures have reduced Micron’s internal and contractor workforce at their Xi’an site, resulting in some impact on output levels of their DRAM assembly and testing operations, according to the latest statement the company shared with the Global Times on Thursday.