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Semiconductors

Samsung's US chip plant halt dents global smartphone output 5%

Monthlong shutdown cuts supply to Qualcomm and Apple: Taiwan research firm

Samsung Electronics produces key smartphone components at its chip fabrication facility in Austin, Texas. (Photo by Jared Tennant/Samsung)

SEOUL -- The prolonged shutdown of Samsung Electronics' chip fabrication plant in the U.S. state of Texas will reduce global smartphone production by 5% in the second quarter of this year, says Taiwanese research firm TrendForce.

Operations at the Austin plant were halted a month ago Tuesday amid a record-breaking cold snap in the southern U.S. that caused widespread disruption to power networks. The loss of supply from the world's second-largest foundry, behind only Taiwan Semiconductor Manufacturing Co., is expected to reverberate through the smartphone industry.

The hit to smartphone production will be equivalent to 17 million handsets, based on separate quarterly forecasts from TrendForce. Output of phones compatible with high-speed fifth-generation wireless networks is set to drop 30% for the quarter.

The Austin facility produces smartphone communications chips for Qualcomm, an area where the U.S. chip company controls a large share of the market. The plant also makes driver chips for Samsung's organic light-emitting diode panels, which are supplied to smartphone manufacturers including Apple.

"TrendForce's latest investigations indicate that the capacity utilization rate for the entire fab is not expected to climb back to over 90% until the end of March," the research firm said in a recent report.

"While we are currently making efforts to resume operations as soon as possible, the process may require more time to reach normal levels as we inspect and reconfigure the facility," Samsung told Nikkei. "Our primary focus is to ensure safety on-site for our workforce as well as our community."

The ongoing shutdown comes amid a global chip shortage that has forced some automakers to cut back production. Neither Samsung nor TSMC has spare capacity that could make up for lost output from the Austin plant.

Samsung was ordered to halt operations at the facility on Feb. 16 as the region suffered widespread blackouts. The controlled shutdown enabled the company to avoid damage to wafers and chips in production.

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