Semiconductor shortage bottlenecks unexpected countries

The impact of the new coronavirus is spreading in Malaysia

🟩 Malaysia is one of the bottlenecks of the semiconductor shortage

Taiwan, South Korea and Japan have long been major players in the semiconductor production supply chain. The concentration of global production capacity in East Asia is also a concern from the viewpoint of security. On the other hand, Southeast Asian countries have not been important as supply chains in the past. However, due to the impact of the new coronavirus rapidly increasing in Malaysia, it has been recognized that it is becoming a bottleneck of semiconductor shortages.

🟩 Semiconductor post-process concentrated in Malaysia

In recent years, Malaysia has emerged as a leading supplier in the post-process of chip testing and packaging. Malaysia’s electronics and electrical products account for 39% of the country’s total exports, with the semiconductor back-end industry accounting for a large part.

Lockdown Policy

However, due to the rapid spread of COVID-19, lockdowns are continuing. As a result, the production capacity of the post-processing process in Malaysia is declining. Semiconductor manufacturers must shut down their plants if a co-infected employee is reported.

🟩 After-production bases of European base manufacturers

In Malaysia, European manufacturers Infineon Technologies, NXP Semiconductors and STMicroelectronics operate factories.

Closure of production facilities

In the lockdown from June 2021, Infineon and STMiCo have announced the closure of some production facilities. Currently, 60% of employees are allowed to continue their business. We operate the factory on the condition that if more than 80% of our employees are fully vaccinated, we can return to 100%.

Impact on the automotive industry

The shortage of semiconductors due to the decline in production capacity in Malaysia is affecting automobile production by Nissan, Ford, Toyota, etc. If the situation is prolonged, it could exacerbate the semiconductor shortage that is hitting the world’s automakers.

🟩 Conclusion

The decline in production capacity of Malaysia’s semiconductor back-end processes is becoming a bottleneck for semiconductor shortages.

Production is being transferred from Malaysia to a back-end manufacturer in Taiwan. Since the production capacity of Taiwan’s post-production process is also close to the limit, it seems that the problem will not be solved immediately.

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