Business tycoons yesterday said that component shortages might persist through next year due mainly to lingering demand-supply imbalances and chaos in the shipping industry.
“It will take a while to resolve ongoing component shortages that have slowed product delivery,” said Rock Hsu (許勝雄), chairman of the Third Wednesday Club (三三會), whose membership is limited to the top 100 firms in each business sector.
Companies would have to exercise caution in dealing with the issue, as it might extend into next year, Hsu said.
Photo: Lee Ya-wen, Taipei Times
Surging demand for semiconductors used in the 5G, Internet of Things, electric vehicle and artificial intelligence sectors is causing component shortages, while the COVID-19 pandemic is driving companies and education facilities to adopt digital transformation, he said.
However, suppliers are unable to expand their facilities to meet the increase in business, and are limited by the pandemic, said Hsu, who is also chairman of Compal Electronics Inc (仁寶電腦), the world’s No. 2 contract laptop maker.
On Tuesday, Quanta Computer Inc (廣達電腦) chairman Barry Lam (林百里) said that demand for laptops is healthy, but component shortages are so serious that he fails to see when the bottleneck would come to an end.
Acer Inc chairman and chief executive officer Jason Chen (陳俊聖) and Hon Hai Precision Industry Co (鴻海精密) chairman Young Liu (劉揚偉) have also made similar remarks.
Overbooking by clients to ensure supply security amid the pandemic might have worsened the situation, and local firms have taken precautionary measures to mitigate potential issues, Hsu said.
Lin Por-fong (林伯豐), chairman of Chinese National Association of Industry and Commerce (工商協進會) and a member of the Third Wednesday Club, said that inventory adjustments would be inevitable if clients practice overbooking, adding that container shortages and shipping delays are making things worse.
Speaking at a digital economy forum in Taipei yesterday, Pegatron Corp (和碩) chairman Tung Tzu-hsien (童子賢) described the component shortage crisis as “a sweet, but difficult burden.”
“The shortages speak to a robust demand,” Tung said.
However, Liu said at an awards ceremony on Tuesday that such shortages do not necessarily mean an increase in demand only, but could also reflect a sense of uncertainty in global supply chains.
Much as consumers hoarded toilet paper at the beginning of the COVID-19 outbreak, tech companies are hoarding components and materials, he said.
“The US-China trade dispute, the Huawei Technologies Inc (華為) ban, the COVID-19 pandemic and the emergence of 5G ... all added to uncertainty,” Liu said. “We are now seeing industries that were not used to do advance ordering — such as the automotive industry — stocking up much more.”
Liu said that component shortages could affect about 10 percent of Hon Hai’s orders, but he added that rush orders could disproportionally affect the company’s business.
“When we get lots of rush orders and overbooking, it does cause a more serious effect. It is hard to tell how long the delays will be,” he said.
The rise of the cryptocurrency dogecoin has reached a new level after the token was used to pay for a lunar satellite launch. SpaceX, Elon Musk’s commercial rocket firm, is to embark on a moon voyage next year carrying a so-called cubesat — a mini-satellite used for space research — from Geometric Energy Corp that has been paid for entirely in dogecoin. The development is the latest twist in the saga over the digital token, which started as a joke in 2013, but is now a dominating Internet meme and sitting on a 21,000 percent rally in the past year. Musk has
CAPACITY EXPANSION: Construction of the site, which is to be the firm’s first mRNA production facility outside of Europe, is to begin this year and likely finish in 2023 COVID-19 vaccine maker BioNTech SE yesterday said it would build a Southeast Asia headquarters and manufacturing site in Singapore to produce hundreds of millions of messenger RNA (mRNA)-based vaccines per year. Construction of the site would start this year, and it could become operational by 2023, the German company said in a statement. “With this planned mRNA production facility, we will increase our overall network capacity, and expand our ability to manufacture and deliver our mRNA vaccines and therapies to people around the world,” BioNTech chief executive Ugur Sahin said. The vaccine produced by BioNTech jointly with Pfizer Inc of
OUTBREAK: About 200 of the airline’s 1,200 pilots are not able to work. Most of them have been quarantined to prevent further infection, but 12 have COVID-19 China Airlines Ltd (CAL,中華航空) yesterday confirmed that it would temporarily reduce its cargo flight services to cope with a pilot shortage, as one-sixth of its pilots have been sidelined by a COVID-19 outbreak. “We are working out a new schedule,” the airline said in a statement after local news media reports on Saturday said that it would be reducing its cargo services from Wednesday, primarily affecting US destinations. CAL declined to give details about its new operating plan, but the reports said that it would be suspending its cargo flights to Dallas Fort Worth International Airport, Hartsfield-Jackson Atlanta International Airport and
HELP? The finance minister faced questions by lawmakers on whether the National Stabilization Fund would step in to help prop up the market, which fell 4.11% yesterday The TAIEX yesterday sank by 680.76 points, or 4.11 percent, to close at 15,902.37 points, the second- largest one-day drop after a fall of 696 points on Jan. 30 last year, amid concern over the rising number of local COVID-19 infections, analysts said. The weighted index, which closed at 16,583.13 points on Tuesday, opened down and lost 300 points in the first 15 minutes of trading, before climbing to 16,550 points at 9:46am, Taiwan Stock Exchange (TWSE) data showed. However, it lost its footing again, plunging 1,400 points to 15,165.27 points at 11:25am. That represented a drop of 9 percent — the largest