A Taiwan Apple supplier has warned that the global chip shortage will worsen without a large and timely increase in COVID-19 vaccinations in the country.
A leading Taiwanese semiconductor supplier, King Yuan Electronics, the world’s leading chip testing service provider, will suspend all domestic production for two days after reporting a COVID infection cluster, negatively impacting chip supply chain at a time of a global shortage.
Cheng Ting-Fang and Lauly Li for Nikkei Asia:
The company confirmed that 77 employees — including 73 migrant workers, most from the Philippines — have contracted the coronavirus at its biggest manufacturing site in Miaoli as of Friday. The number could rise as the company is testing all its 7,300 employees with government help, an official told Nikkei Asia.
KYEC estimates the production suspension will affect revenue and output by 4-6% in June. “There will be surely an impact on output for June,” company president A.H. Liu told Nikkei Asia. He said the company will initiate “super hot” production runs to make up for the lost days.
King Yuan, better known as KYEC, is a key supplier to Qualcomm, Intel, Nvidia, Mediatek and Novatek.
KYEC’s production suspension could aggravate the global chip shortage, which has already hit a swath of players from automobile makers to consumer electronics giants… “If the majority of the population in Taiwan do not receive COVID vaccines soon, I fear it is only a matter of time until more and more companies will be forced to halt production due to the spread of the virus,” an Apple supplier executive told Nikkei Asia.
Fewer than 570,000 of Taiwan’s 23.5 million people, or around 2.4%, have received a first COVD vaccine dose.
The island is short of vaccines. Japan and the U.S. — both important trading partners and key buyers of Taiwan-made semiconductors — have said they will donate vaccines to Taiwan.
MacDailyNews Take: What’s the issue? Are companies like Apple, Intel, etc. that face the very real possibility of significant supply chain disruptions afraid to help by procuring and donating COVID-19 vaccines en masse to Taiwan for fear of angering their Chinese overlords?
Earlier this month, Terry Gou, the billionaire founder of major Apple supplier Foxconn, said that his charity plans to apply to import five million doses of BioNTech SE’s COVID-19 vaccine into Taiwan as soon as possible.