The Chips are down as US tackles micro-chip shortage

[ASEAN NOW News]

Vice President Kamala Harris recent visit to SE Asia highlighted greater international cooperation to bolster supply as the United States seeks to tackle a global microchip shortage.

 

 

Earlier in January U.S. chipmaker Intel injected $475 million into its Vietnam division, its biggest chip assembly and testing site globally, even as the company looks set to outsource more production and risks being eclipsed by the more advanced technology of rivals.

 

 

Located in Saigon Hi-Tech Park, Ho Chi Minh City, the facility is Intel's largest assembly and test sites worldwide, where the US chipmaker also operates similar plants in the region, namely, China and Malaysia.

 

The chip crunch was initially triggered by higher sales of consumer electronics during the coronavirus pandemic but has been exacerbated by supply chain problems caused by disruptions at key plants.

 

The auto sector has been hardest hit, with car giants including Volkswagen and Toyota cutting output, but manufacturers of smartphones and consoles have also warned of problems.

 

Asia is the centre of the chip industry and during a visit to Singapore and Vietnam, Harris said in a meeting with officials and executives that the pandemic highlighted the vulnerability of global supply chains.

 

"When we look at the disruption to the supply chain, this is an issue that requires all nations... (to) work together to coordinate," she said.

 

"So, there must be some collaboration, and at least some coordination, around what we do to meet the demand."

 

The pandemic has also hit supply chains by disrupting the vital global shipping network. Several SE Asian factories have had to scale down production due to Covid lockdowns.

 

The chip shortages have triggered calls in Western countries to strengthen their domestic semiconductor industries to protect against future shocks.

 

But at Tuesday's talks, Singapore Trade Minister Gan Kim Yong warned "there are limits and challenges to what a country can do on its own... Electronics and semiconductor supply chains are complex and need to be globally optimized."

 

The discussion was attended by executives from companies including GlobalFoundries, a US-headquartered chipmaker with factories in Singapore, US asset manager BlackRock, and Singapore state investor Temasek, Bloomberg News reported.

 

Singapore is also home to semiconductor factories, as well as one of the world's biggest ports.

 

GlobalFoundries recently announced it would build a $4 billion plant in the city-state, scheduled to start operations in 2023.

 

Intels operations in Vietnam

 

Vietnam has seen increasing foreign investment in its chip industry.

 

Some key Asian chip-producing countries have faced fresh virus outbreaks in recent months, prompting warnings that curbs could hit their semiconductor industries.