▲ Samsung Electronics Austin, Texas, USA (Photo Credit=Samsung Electronics)
The aftermath of the shutdown of Samsung Electronics’ Austin semiconductor plant, which was shut down due to a record cold wave in the United States, is prolonging. Samsung Electronics’ Austin semiconductor plant has been stopped for nearly a month since the 16th of last month (local time). This is the first time the Austin plant has been shut down since its establishment in 1998.
According to the industry on the 13th, it is expected that it will take 2-3 months to fully operate the Samsung Electronics Austin Foundry plant. As the shutdown, which was originally expected for about a week, is prolonged, the damage scale is expected to increase astronomically.
Austin’s temperature has recovered to normal levels, and most of the power has been restored, but due to a lack of electricity, a circular power outage is taking place. The time to resume operation of the semiconductor production line has been delayed than expected, as water supply disruptions have occurred due to a frozen water pipe and a drop in water pressure.
The Austin plant’s proportion of Samsung Electronics’ total non-memory production is estimated to be about 24%. The main mass-produced items are SoC (system on chip), RF (radio frequency), DDI (driving chip), PMIC (power management semiconductor), and electronic semiconductors.
The industry estimates that even if the Austin plant operates normally in May, a disruption of more than KRW 1 trillion will occur in terms of sales. Last year, the Austin plant’s performance was 3,900 trillion won in sales and 900 billion won in net profit.
Considering that the Austin plant’s daily average sales amounted to 10.7 billion won last year, it seems that more than 300 billion won has already occurred in one month after the operation was stopped.
Yuanta Securities analyzed that “the annual output of the Austin plant is estimated to be 100,000 sheets (100K), and the wafer loss due to this shutdown is estimated at 400 billion won.”
▲ A neighborhood in Austin, Texas, USA, is covered with snow and ice in the worst cold wave on the 16th (local time). Austin/AP Yonhap News
The semiconductor production line is a microprocessor that goes through hundreds of steps, so if the operation is stopped even for a moment, most of the products in the production process must be discarded and re-produced, causing enormous damage.
Immediately after the local plant was shut down, Samsung Electronics dispatched more than 300 engineers, including 60 employees and 240 employees from partner companies, to support facility maintenance and early restoration, but as expected, normal operation is not easy.
An official from Samsung Electronics said, “To restart the semiconductor plant, you need to review the details such as temperature and humidity again and meet the production conditions so that a certain level of yield can come out.” “It’s like starting anew. It is difficult to predict the timing of full operation because the conditions for each machine must be set again.”
‘KXAN’, a local broadcaster in Austin, Texas, said, “According to a local official at Samsung Electronics, power at the Austin plant has been restored and we are working to resume operations as soon as possible. You can lose money.”
The longer the disruption in production, the greater the loss. Samsung Electronics suffered a loss of 40 billion won when a four-hour power outage occurred at the Giheung plant in 2007. In 2018, a power outage of less than 30 minutes at the Pyeongtaek plant suffered damage of 50 billion won. Although it took less than 30 minutes, more than 1 billion won per minute was incurred. In the case of a power outage at the Hwaseong plant in 2019, it suffered billions of won worth of damage.
In this situation, it is known that Samsung Electronics recently submitted a revised proposal to the Texas local government regarding tax reduction benefits negotiations over a proposal for expansion of around 20 trillion won.
Samsung Electronics said that no decision has been made yet in negotiations with various regions such as Austin, Arizona, and New York, as well as Korea and China, in relation to the construction of additional semiconductor factories.