Chip supplies are being threatened once again by world events.
A recent outbreak of COVID in China of around 5,000 cases, while minor by US standards, is prompting China to shut down factories in areas where car audio manufacturing facilities are located, including Dongguan and Shenzhen in southern China.
Epsilon confirms that at least some of its factory employees have been told to quarantine at home until March 21. This will delay the release of some of the company’s new products, said VP Sales Ronnie Brashear.
Shipping from China is also expected to face new delays, as trucks take longer to reach the port due to factors including check point delays, where drivers are required to show PCR test results. Currently the delays are at 12 hours, but are expected to climb to two weeks, said The New York Times.
Air freight is also expected to be impacted, as flights are being rerouted away from Shanghai’s key Pudong airport, said The Times.
The war in Ukraine may also cut into chip production, as anywhere from 50 to 75 percent of the world’s neon production comes from Ukraine and neon is used in manufacturing semiconductor chips.
Neon runs the lasers needed to produce chips, according to Automotive News.
One neon company named Ingas is located in the city of Mariupol, which has been heavily besieged. Another is based in Odessa, another key target of Russia’s invasion, said The Detroit Bureau.
Larger chip makers such as Intel, Samsung and TSMC have neon reserves to last 2 months or more. Smaller chip makers will run out of neon sooner, reports PC Gamer.
Earlier this year, economists, car makers and some car audio suppliers saw signs of product shortages lessening (though not resolving). The new challenges may waylay those improvements. Some economists have predicted improved product flow late this year or into 2023.
Photo: Continental
