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Samsung's Austin Chip Production Back Near Normalcy Levels: Reuters

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·1 min read
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  • Samsung Electronics Co Ltd’s (OTC: SSNLF) Austin, Texas chip plant production had returned to near-normal levels last week after over a month of global chip capacity crunch led interruption, Reuters reports.

  • Samsung and other chipmakers with production facilities in the area had to shut down operations due to severe weather on Feb. 16, further intensifying the crisis.

  • Qualcomm Inc (NASDAQ: QCOM) 5G radio frequency chips and Samsung display and image sensor chips account for 65% of the Samsung plant’s monthly production. Other chips include power management integrated circuits (PMICs) and a small number of chips that control electrical parts.

  • The disruption can hamper the global smartphone production between April and June by 5% and may hamper the 2021 5G smartphone penetration rate.

  • Lower smartphone vendor inventory level can hamper smartphone production from the plant shutdown in the second half of the year.

  • Samsung’s estimated losses between $265 million-353 million (300-400 billion won) will mainly reflect in January-March quarter earnings as per analysts.

  • This month, NXP Semiconductors NV (NASDAQ: NXPIexpected a revenue hit of $100 million from its Texas production shutdown.

  • German chipmaker Infineon Technologies AG (OTC: IFNNF) (OTC: IFNNY) expected a quarterly revenue hit in the high double-digit million euro range from the shutdown.

  • Price action: QCOM shares traded lower by 0.66% at $130.4 in the premarket session on the last check Tuesday.

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