One of the world's major chip-testing organizations was temporarily shut down due to an outbreak of COVID-19 infections at a factory in central Taiwan, the latest warning of potential disruption to a technological supply chain already beset by component shortages, Bloomberg reported on Monday.
According to Taiwan's Centers for Disease Control, cited in the report, King Yuan Electronics Co. shut down its main operations in Miaoli County over the weekend, reporting 182 confirmed cases as of June 6. The majority of those are foreign employees, especially factory workers.
The government put all 2,000 of the firm's international workers, or around 30% of its employees, on a 14-day quarantine, and the company has had to rely on temporary local workers to get production lines up and running again, as stated in the report.
King Yuan reportedly began operations last night at lower-than-normal production quantities, Aaron Chang, the company's acting spokesperson, told the agency.
"Once migrant workers return to production lines in two weeks, the company will speed up production to make up for its loss," Chang is quoted in the report as saying. “The company sees no major impact on annual finances and businesses."
According to the report, King Yuan Electronics expects that production capacity and revenue are likely to fall by 30-35% in June.
The outlet emphasizes that the surge in COVID-19 cases and the repercussions in Taiwan highlight the threat posed by the global technology supply chain's reliance on a limited number of major firms. Taiwan's chipmaking business is a critical supplier and potential bottleneck for enterprises in a variety of industries, including consumer electronics, server farms, and the car industry.
Companies worldwide are already coping with a chip scarcity that has slowed production and forced the closure of entire auto plants, forcing the United States and China to look for measures to enhance domestic supply.
The world's shortage of microchips is widely attributed to many reasons, including the US-China trade war, which impacted the supply chain severely even before the ongoing pandemic. Last month, the White House spokeswoman Jen Psaki stated that the US considers the global chip shortage to be a national security concern due to its impact on American industry.