Memorychip tester and packager Powertech Technology Inc (PTI, 力成科技) yesterday said that strict COVID-19 control measures are disrupting production at its plant in Xian, China, but the issues would have a limited effect on its revenue this month.
The company’s subsidiary Powertech Semiconductor (Xian) Co (西安力成半導體) provides DRAM chip testing and packaging services in Xian, as well as semiconductor backend manufacturing services, mostly to US firm Micron Technology Inc.
“Due to the COVID-19 pandemic status in Xian, the local government further tightened lockdown measures, which did not significantly impact the revenue of Powertech Semiconductor (Xian) at the beginning,” PTI said in a regulatory filing. “However, some employees could not go to work.”
Photo: Grace Hung, Taipei Times
The plant is operating at 40 to 50 percent of capacity, it added.
The lockdown, which took effect on Thursday last week, would have limited effect on its consolidated revenue and profit in the near term, but longer-term effects depend on the subsequent action by the Xian City Government, PTI said.
The company is mitigating the situation by adjusting the semiconductor production schedule and has asked its main customer to adjust the delivery schedule according to the temporarily reduced output, it said.
PTI reported that consolidated revenue for the first 11 months of this year rose 9.27 percent annually to NT$76.47 billion (US$2.76 billion).
The Xian unit, launched in May 2015, reported NT$5.11 billion in revenue last year.
Micron said that the lockdown has reduced its team member and contractor workforce at the Xian site, affecting output levels at its DRAM assembly and test operations there.
“We are tapping our global supply chain, including our subcontractor partners, to help service our customers for these DRAM products. We project that these efforts will allow us to meet most of our customer demand. However, there may be some near-term delays as we activate our network,” Micron said in a statement on Wednesday. “New or more stringent restrictions impacting our operations in Xian may be increasingly difficult to mitigate.”
South Korea’s Samsung Electronics Co also faces disruptions at its Xian facilities, mainly to scheduling shifts, market researcher TrendForce Corp (集邦科技) said in a news release.
Samsung operates two NAND flash fabs in Xian, assembling consumer electronics such as universal flash storage and solid-state drives, TrendForce said.
As the company’s inventory levels are relatively high, it should be able to keep supplying these products to customers with no issues in the short term, the market researcher said.
However, TrendForce said that if the situation does not normalize within one or two weeks, short-term effects on Samsung’s production utilization rate might lead to a slight decline in output.
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