Extended lockdown would hurt Samsung's semiconductor factory in Xian

Amidst the rising cases of COVID-19, China has partially locked down Xian from April 16 to 19 to curb the spread of the virus. However, this doesn't seem to be a good sign for Samsung Electronics' semiconductor factory in Xian. Because, according to BusinessKorea, the semiconductor production in the Samsung factory is likely to be affected if the lockdown is extended.

Notably, Samsung Electronics' semiconductor factory in Xian produces 250,000 sheets of semiconductor wafers per month. This amounts to about 40% of Samsung's total NAND flash production.

The lockdown may cause supply disruptions

Back in December 2021, when Xian was locked down, Samsung Electronics flexibly operated its facilities, allowing its operating personnel to stay inside the factory.

Although there are no operational issues at this time, if the lockdown is extended and logistics are disrupted to stop the spread of COVID-19, it may cause disruptions in semiconductor production. Apparently, shipments will also be delayed. The U.S. Chamber of Commerce in China noted that around 57% of the companies operating in China went through logistics disruptions because of the lockdown in Shanghai.

The main producer of Apple’s MacBook in China, Quanta Computer has already stopped operating its factories. Samsung Electronics is also facing similar challenges in laptop production.

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Sagar Naresh

Business NAND Samsung Electronics