NXP Resumes Operations at Austin Plant After One Month Halt... Samsung 'Not Yet'

The scene of downtown Austin, Texas, USA, which experienced a cold wave and heavy snowfall last month [Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Due to the record-breaking cold wave in the United States, the Dutch semiconductor manufacturer NXP, which had suspended operations last month, has resumed operations after a month. They started initial operations following equipment inspections and stated that they are following a recovery plan to return to the pre-shutdown level. Samsung Electronics, which also closed its nearby factory, appears to still be focusing on preparatory work before resuming operations at its Austin plant.

According to local foreign media and related industries on the 13th, NXP announced that it resumed initial operations at its Austin manufacturing facility on the 11th (local time). Due to the cold wave and storm that hit Austin, causing shortages in power supply, two local wafer manufacturing facilities had completely suspended operations since the 15th of last month, marking about a month of shutdown. At that time, the local power company Austin Energy experienced a power shortage and first notified semiconductor manufacturers of the power supply suspension, leading the companies to prepare and halt factory operations.

NXP explained that power affecting the equipment has been restored and that the cleanroom environment, an essential semiconductor facility, was evaluated as safe to restart on the 27th of last month. Subsequently, the NXP team began repair work on-site, conducted system and equipment inspections, and currently, employees are assessing wafer-level processes in operation to ensure appropriate product quality.

Kurt Sievers, CEO of NXP, said, "The virtual deterioration and destruction of public facilities in Texas last month were unprecedented," adding, "We are pleased to have restarted initial operations at our Austin plant and are steadily following a recovery plan to restore the wafer fab to the level before the cold wave-induced shutdown." He continued, "We understand the impact of supply disruptions on our customers and are striving to increase to full production while maintaining quality levels amid complex manufacturing processes," and added, "We continue to share fundamental situations with our customers and are constantly working to minimize potential disruption risks."

Despite NXP’s factory resumption, foreign media reported that there has been no news yet of other semiconductor factories, including Samsung Electronics, resuming operations. Samsung Austin Semiconductor Plant told the local media Austin Business Journal, "We are making efforts to resume factory operations as soon as possible, but more time is needed to inspect facilities and restore them to normal levels." Samsung Electronics has dispatched about 100 experts from Korea to Austin to fully focus on resuming operations.

Samsung Electronics is facing difficulty avoiding short-term losses due to the Austin plant shutdown. Industry estimates suggest that Samsung’s revenue loss from this incident could reach between 300 billion and 400 billion KRW. Some speculate that considering penalties for delayed product deliveries, losses could reach up to 1 trillion KRW. There are also projections that Samsung Electronics’ Austin plant may not be fully operational until May, indicating the potential for even greater damage.

Regarding the scale of damage, NXP mentioned while announcing the resumption of factory operations, "At this point, NXP believes that the previously forecasted Q1 sales guidance for this year will not be affected, and although no guidance has been provided for Q2 sales, the current estimate is that there will be an impact of about 100 million USD (approximately 113.6 billion KRW) on Q2 sales." NXP plans to announce information on sales for Q1 and Q2 at the end of April.

This content was produced with the assistance of AI translation services.