New COVID-19 outbreaks in Asia could exacerbate the global chip shortage

New outbreaks of COVID-19 in Asia could create delays in the global supply chain and exacerbate the global semiconductor shortage, according to a new report from The Wall Street Journal.

Taiwan, which is a significant hub for chip manufacturing, is currently experiencing a surge of COVID-19 cases. On Saturday, Taiwan’s Central Epidemic Command Center announced that there were 251 new confirmed cases of COVID-19 and 26 deaths. On Friday, the agency reported 287 new cases and 24 deaths. And cases have been on the rise since early May. “Starting on May 10, COVID-19 infections jumped from one to three-digit figures within a matter of days,” South China Morning Post reported.

The outbreak is having a big effect on at least one major chip company in Taiwan. “At King Yuan Electronics Co., one of the island’s largest chip testing and packaging companies, more than 200 employees have tested positive for the virus this month, while another 2,000 workers have been placed in quarantine — cutting the company’s revenue this month by roughly a third,” the WSJ reported.

TSMC, which makes chips for Apple, Qualcomm, and many other big tech companies, says it has not yet been affected, according to the WSJ. But the company already warned in April that chip shortages could last through 2022, and it’s unclear how the COVID-19 outbreak in Taiwan might affect that estimation.

The WSJ reported that factories in Malaysia have had their manufacturing capabilities slowed due to COVID-19 as well. “All told, the Malaysia Semiconductor Industry Association says the lockdown will reduce output by between 15% and 40%,” according to the WSJ.

Shipping centers in Asia have also been affected by the pandemic. For example, Yantian, a major container port in Shenzhen, is at 30 percent of its normal activity, the WSJ reported.