From Semiconductors to Chemical Products... Global Supply Chain Emergency (Comprehensive)

[Asia Economy Reporter Yujin Cho] The global supply chain crisis, which began with semiconductors, is spreading to the entire petrochemical product sector, the "rice" of the industry, heightening tensions within the industry. The impact is intensifying across industries, from automobiles to smartphones, consumer electronics, and medical syringe disposal containers.

According to the Wall Street Journal (WSJ) on the 17th (local time), Japanese automakers Toyota and Honda announced that they will halt operations at their North American plants due to shortages of key supplies such as semiconductors and petrochemical products.

Honda will suspend operations at its U.S. and Canadian plants for one week starting on the 22nd, citing COVID-19, semiconductor supply shortages, and logistics congestion as causes. According to Nihon Keizai Shimbun, this is the first time Honda has completely stopped operations at its North American plants.

Toyota also temporarily halted operations at its Kentucky plant in the U.S. due to shortages of raw materials such as semiconductors and petrochemical products. However, it did not specify the duration or scale of the shutdown.

The semiconductor shortage crisis has spread to consumer electronics such as PCs, TVs, and smartphones. Japan's major panel manufacturer Japan Display is struggling due to unstable semiconductor supply. A Japan Display official told Nihon Keizai Shimbun, "If we do not raise semiconductor prices, we cannot produce products, but we cannot predict how much of the raw material cost increase can be reflected in product prices," adding, "The semiconductor supply shortage will peak next month."

The biggest cause of the semiconductor supply chain crisis is increased demand. The long-term lockdown measures and the expansion of remote work due to COVID-19 led to massive purchasing demand for IT-related products, which overlapped to cause the shortage.

Moreover, last month's record cold wave caused a complete shutdown of semiconductor plants in Texas, exacerbating the situation. Samsung Electronics' Austin plant and Dutch chip manufacturer NXP have not resumed normal operations even a month after the shutdown.

The Texas cold wave also impacted the petrochemical product supply chain. Due to power outages caused by the record cold, operations at U.S. petrochemical plants concentrated in Texas were disrupted. Dow, a petrochemical company located in Texas, saw its plant operating rate drop to about 80% by the end of this month.

Companies producing plastic-containing products such as syringes, syringe disposal containers, medical gowns, and gloves are also suffering from supply chain issues. With the expansion of COVID-19 vaccine distribution, demand for medical devices has surged, and the shortage of plastic raw materials has led to a severe supply shortage.

Due to supply shortages, plastic prices in Asia and Europe, the main import sources, are already on the rise, WSJ reported. Dow's Chief Financial Officer Howard Ungerleider predicted, "It will take at least six months or more to resolve the plastic supply imbalance."

Additionally, prolonged COVID-19 has caused labor shortages at ports and container shortages due to trade imbalances, further pressuring the supply chain with delays in loading and unloading operations at California ports.

Manufacturers, while hopeful for economic reopening due to vaccine distribution, are increasingly concerned as the supply chain crisis deepens. WSJ noted that business executives and market analysts expect that the supply chain crisis will lead to increased production costs and logistics delays across numerous industries, ultimately affecting consumer prices.

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