In late March, the domestic epidemic situation was basically controlled, but the foreign epidemic situation was erupting, and it was in the rising stage, and it had not been effectively controlled. With more and more confirmed cases overseas, countries such as Malaysia, the Philippines, and India have blocked their cities.
At 10 pm on March 16, Malaysian Prime Minister Tan Sri Muyudin announced the implementation of Perintah Kawalan Pergerakan, which will be closed to the country for 14 days from March 18 to March 31, stipulating that in addition to the institutions that provide essential services, other governments and Private institutions will be shut down, including the complete shutdown of domestic enterprises and factories.
A "one size fits all" policy is clearly not desirable. After discussions with the local government, it was decided to relax the shutdown restrictions. On March 18, the Malaysian National Security Council issued an announcement approving factories that produce key commodities to continue operations with minimal staffing and rotation, including electronics such as semiconductors.
The Malaysian National Security Council announced that companies allowed to continue operations must strictly comply with the conditions set by the authorities, including reducing employees to a minimum or at least half of the registered employees, and the company must implement home work for employees who do not involve critical production activities Wait.
Suspension caused tight production capacity?
As we all know, Malaysia is a major semiconductor production town, gathering many large semiconductor manufacturers such as Intel, Texas Instruments, Renesas, ON Semiconductor, Infineon, Murata, Taiyo Yuden, Western Digital, Sun Moonlight, Universal Crystal and so on.
In addition, Malaysia is also one of the major centers of packaging and testing in the world. According to statistics, Southeast Asia has a 27% market share in the global packaging and testing, of which Malaysia occupies only half, including Sun Moonlight, Tongfu Microelectronics, Huatian Technology, Suzhou Gujing There are packaging and testing plants in Malaysia.
After the action control order was issued, some companies such as Cypress, ON Semiconductor, and Renesas issued an announcement to their customers that the company had ceased production or that all non-production and operating employees were working from home.
Under this circumstance, the market is worried that the production capacity of the above companies will be affected, which may cause the chip market to be out of stock on a large scale. In addition, whether silicon wafers, CPUs, passive components, packaging and testing foundry production capacity, etc., which are currently out of stock, will be affected and cause shortages, it is also the focus of attention in the industry.
However, the author learned from the above-mentioned companies and other parties that the company's plant in Malaysia received a shutdown notice on March 17, and production will be suspended on March 18. However, for wafer fabs and packaging and testing plants, production was suddenly stopped The losses are huge, especially for the wafer fabs, which are started all year round except for the annual maintenance, so this time they have not stopped production.
The same goes for the packaging and testing plant. Huatian Technology said that the company's Malaysian plant has not ceased production and has no major impact so far. It is understood that in 2019, Huatian Technology and its controlling shareholder Huatian Electronics Group successfully acquired 75.72% of the equity of Malaysian listed company Unisem.
In addition, the author learned from the executives of a domestic semiconductor company that because its subsidiary in Malaysia has a pressure sensor on a ventilator, it applied for a special resumption of work and has resumed production. However, not all semiconductor companies can apply for special resumption of work. Only products related to epidemic prevention can apply for special rework.
In addition to production, due to the spread of the epidemic globally, problems with upstream raw materials and transportation have also plagued major semiconductor manufacturers.
Although DHL and FedEx have not ceased operations at the moment, the above-mentioned sources pointed out that the arrival of raw materials may be intermittent due to the impact of Japanese suppliers and logistics. In addition, the reduction in the frequency of imports and exports also caused the transportation costs to double.
The shortage of CPU, silicon wafers, and passive components is more serious?
In terms of CPU, since this year, the CPU has been in short supply. Intel Malaysia ’s packaging and testing plant accounts for 50% of the world ’s production capacity. Tongfu Microelectronics is the largest AMD packaging and testing service provider. Whether it is downtime or halving staff, the damage to the CPU supply side is very large.
In response, Intel CEO Bob Swan sent an open letter to customers and partners. Shiwang said that although the epidemic is still developing, Intel factories around the world are still operating on a relatively normal basis, maintaining the current on-time delivery rate of over 90%.
Like Intel, Tongfu Microelectronics' plant in Malaysia has not ceased production, and its current impact is not significant.
In terms of silicon wafers, on March 19th, the global silicon wafer maker Universal Crystal said that because the Malaysian plant complies with local government regulations, it has been approved to resume normal production. Global Crystal Malaysia's plant mainly produces 6-inch silicon wafers. Due to the epidemic, the supply of silicon wafers below 6 inches is currently tight, and Global wafer's Malaysia plant has full capacity.
In addition, the recent news that electronic components are out of stock and prices continue to increase, and Malaysia is also a major producer of electronic components. It is understood that the electronic component manufacturers that set up factories in Malaysia include Huaxinke (resistance), Wang Quan (resistance), as well as Nissho Murata (inductor, MLCC), aluminum electrolytic capacitor factory Nichicon, Nippon Chemicon, solid state capacitor factory Panasonic and so on.
After easing the restrictions on shutdowns, according to Taiwan media reports, Keli Sun said that it now appears that the subsidiary Wang Quan Malaysia has the opportunity to resume work by 30%. Together with the Kunshan and Hunan factories in China, it will help reduce the impact of production and shipment. Malaysia mainly produces conventional resistor products, accounting for about 50% of the total resistance capacity of Qilixin.
Huaxinke also said that the Ipoh plant in Malaysia is also expected to benefit from the government's relaxation of the ban and restart of work. At present, the customer's shipping status is normal. Huaxinke's plant in Ipoh, Malaysia mainly produces automotive resistors.
Due to the sluggish market demand, since March, the most expensive MLCCs and resistors that are out of stock have started to take orders, and the market price is gradually falling. It can be seen that in the field of passive components, shortages caused by shortages have not been more serious.
From the above, although the semiconductor industry has benefited from the relaxation of shutdown restrictions, semiconductor manufacturers have stated that Malaysian factories have resumed production or have never stopped operations. However, like the Chinese semiconductor manufacturers during the epidemic, major semiconductor manufacturers in Malaysia also face many problems such as reduced on-site staff utilization, lower plant capacity utilization, shortage of upstream raw materials, and rising logistics costs.