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Reports from Tom’s Hardware, indicates that Samsung has been given an order to shut down its two chip factories in Texas. This order was given because of power shortages caused by deadly winter storms in the state.
The order was also extended to other semiconductor companies like NXP Semiconductors and Infineon Semiconductors among others.
This order was passed by the state utility company Austin Energy. A company that supplies electricity to the city of Austin. No date has been issued yet as to when these companies are to commence operations.
The order was passed because of deaths that have been blamed on the catastrophe. As a measure to prevent more deaths, companies are being shut down.
Unplanned production shortages can lead to long-term consequences. Consequences which may take several days for the factory to return to full operation after power is restored.
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What This Shut Down Could Mean For Samsung
Tom’s Hardware further explained that its Sources said as a result of the power outages, some products may have been damaged. This will therefore cause affected companies millions of dollars in losses. The source further said that some microcircuits take a month or more to go through various production stages. During these stages, unplanned outages can destroy an entire batch of unfinished products.
No report has indicated whether Samsung was notified before the power outages or not, to help minimise impact on production and quickly restart normal operations after power returns.
Given the ongoing global shortage of chips, this is a very bad news for the mobile industry. Although all factories are equipped with backup generators for power shortages, they cannot work for a long period of time as in this case.
Due to abnormally low temperatures causing icing on about 50% of wind turbines in Texas, the order was given with intention of providing citizens with electricity.
Samsung Electronics’ share price fell 2% in Seoul on Wednesday, while the overall Kospi slipped 0.9%.