The outbreak of the epidemic in the Taiwan factory, the escalation of the core panic, the chip supply is even worse!

Original core world

Recently, the local epidemic in Taiwan has continued to spread. The number of confirmed cases has exceeded the 10,000 mark, and the death toll has continued to rise. The administrative agency of the Taiwan authorities announced on the 7th that the three-level alert control will be extended for two weeks to June 28. Schools at all levels in Taiwan will be closed until summer vacation to avoid unnecessary movement, activities or gatherings.

Since the end of last year, due to increased demand, the global semiconductor industry has fallen into a serious shortage of goods, which has also filled Taiwan's orders, the main production force. As a major town in the global semiconductor industry, Taiwan of China occupies a prominent position in the field of foundry and packaging and testing. The changes in Taiwan’s epidemic have always been a string hanging on the cusp of semiconductor people.On June 4, after a group of foreign migrant workers broke out in the packaging and testing plant KYEC, the outbreaks of Chaofeng, Zhibang, and Jingding continued to spread all the way to the Hsinchu Science Park, Taiwan’s science and technology town, and the 12-inch plant of TSMC also spread. A female employee was diagnosed, and an employee of Power Semiconductor Manufacturing Corp. also diagnosed. Everyone in Taiwan's technology industry is at risk. The industry has become highly vigilant about the Taiwan epidemic. Simsex will mainly sort out the status quo and possible hidden worries of Taiwanese companies, and provide you with some value thinking.

KYEC, Jingding, etc.

Status of enterprises affected by the epidemic

Judging from the current situation, the main companies that have suspended operations due to the epidemic are KYEC and Jingding. From the current scope of influence, KYEC has a more obvious impact.On June 7th, KYEC announced that all its migrant workers would immediately suspend work. Due to the shortage of manpower and the resumption of work load, the increase will affect the company’s June revenue and output from the original estimate of 4% to 6%. The high is 30% to 35%. KYEC currently ranks the eighth largest packaging and testing plant in the world, the largest IC test plant in Taiwan, and the top 50 chip fabs in the world. Fifty-six percent of KYEC’s testing services are needed.

In the first quarter of KYEC’s revenue, 35% was wafer testing and 41% was product testing. According to Taiwan media’s calculations, it occupies 16% of the global semiconductor professional logic testing market share, second only to ASE’s 32% market share. , Its main customers include MediaTek, Nvidia, Intel, Novatek, Qualcomm, Xilinx, STMicroelectronics and other large global chip design companies and IDM companies.Research organizationIsaiah Researchpredicts that some urgent orders of the two customers may be transferred to other factories.

For the client, Isaiah Research analyzed that MediaTek has about 50% of non-final tests in KYEC, which may affect Wifi products, RF, AP Related products remain to be seen. As for Novatek, Intel, Winbond, Macronix, Supermicro, Nvidia, Himax, Haowei Technology and other companies are also customers of KYEC, but the proportion is relatively small, so the impact is not significant.For product transfer orders, Isaiah Research estimates that MediaTek may transfer some urgent order products to ASE and Sigurd; Novatek will transfer to Nanmao.However, most packaging and testing plants have stated that the production capacity that can be supported is extremely limited, and some manufacturers can at most take up 10% of KYEC.

KYE

KYEC, the world's largest professional IC testing agency, issued an announcement confirming that 2 foreign migrant workers were diagnosed with the new crown. In the following days, the number of confirmed cases of KYEC increased daily, and work was completely suspended on the 5th and 6th. More than 2,000 foreign migrant workers were required to take all leave. At present, KYEC is in a state of reduced load operation.

TSMCelectricity

According to this front-end media report, after one employee of TSMC was diagnosed on the 22nd, another employee was diagnosed on the 26th. Recently, on June 6, TSMC reported that an additional employee was diagnosed. The infected employee and another KYEC employee were family members living in the same household. In response, TSMC only responded to the media saying that the employee I have not joined the company in the past few days, so it does not affect operations.

Super abundant

IC testing plant Chaofeng issued an announcement on the evening of yesterday(8)that after three days of general screening from June 4 to June 7, a total of 4 employees were finally diagnosed with new coronary pneumonia. Part of the production will be suspended during the rapid screening and this time. The incident forced some employees to stay at home and reduce the manpower for production. It is estimated that production in June will be reduced by about 10%.In three days, 4264 quick screenings were completed and 208 high-risk employees performed PCR tests. 46 of them were positive for quick screenings. After a second PCR test, 4 were finally diagnosed.The increase in diagnosis of Chaofeng employees has also made many chip factories nervous. At present, due to short supply, the delivery time of Chaofeng products has been extended from two weeks to more than two months. If subsequent production is affected by the epidemic, the overall chip supply will be tight. The situation is even worse. Chaofeng emphasized that the reduced output affected in June will be compensated by increasing production and improving production efficiency after the epidemic is controlled.

Accton

Last week, KYEC broke out a cluster of migrant workers. The epidemic spread to large factories such as Zhibang, Chaofeng and Powerchip. Zhibang began to screen all employees from last Friday (4th) . As of yesterday, 13 people were diagnosed. However, Earlier, it was reported that the number of positive screens increased by 6 people.Zhibang pointed out that in addition to fully assisting the follow-up medical and life-related needs, so that employees can rest at ease, it will also take the initiative to expand preventive epidemic prevention measures. The dormitory for foreign employees will be expanded and the number of foreign employees living in the dormitory will be reduced. The screening of 1,500 people in the Zhunan plant will be completed on June 10. Although affected by the epidemic, Zhibang said that the current production and shipments are still operating normally, and announced the consolidated revenue of NT$4.911 billion in May, an increase of about 30.49% from the same period last year. The cumulative consolidated revenue from January to May this year was 22.734 billion yuan, an increase of approximately 16.23% over the same period last year.▎JingdingIt was announced on June 8 that the production line will be suspended for 2 days due to the diagnosis of 6 foreign employees at the Zhunan plant. Production in June is expected to decrease by 2-3%. The latest news shows that Jingding’s two-day suspension has been extended to three days. It was originally expected that a quick screening would be conducted on 430 domestic employees on the morning of the 8th, but due to lack of manpower scheduling, they were temporarily suspended, and it was decided to conduct a quick screening on the morning of the 9th.

Power Semiconductor

The infection storm of the large Zhunan technology plant continues to expand. The foundry Power Semiconductor Manufacturing announced yesterday(8) that anemployee at the Zhunan plant was diagnosed and five employees who had close contact with him were listed ;Power Semiconductor Manufacturing became KY After Dian, Chaofeng, Zhibang, and Jingding, the fifth Zhunan science and technology factory where employees were infected with the epidemic.Since the electric power product is the world's sixth largest grain round foundries, it can be tight in the international foundry capacity, the market focus on whether the impact of production.Power Semiconductor Manufacturing Corp emphasized that the infected employees were infected due to family gatherings. Non-factory employees were infected in groups, and the employee was not a production- related support department. Therefore, it has no impact on the company's operations, production and sales. Power Semiconductor Manufacturing Corporation issued a statement today. said the company uphold the vaccination priority and security guard employee health principles have been implemented to perform shunt placement and home office measures to reduce low-risk cluster, at the same time, all the electric power accumulated more than 300 foreign workers, were recently completed and all rapid screening Is negative.

Han and Tang

Hantang(2404),TSMC’s largest clean room engineering co-factory,also reported that three employees were diagnosed. As a result, more than 110 people from the company’s P8 plant at TSMC’s 12 plant were isolated at home, and the project was delayed.

Hantang undertook about 80% of TSMC's clean room projects. It is reported that an employee in Han and Tang Dynasties who was in charge of the P8 clean room project of TSMC’s Baoshan 12 plant under construction was diagnosed due to a family gathering and caused two colleagues in the same dormitory to contract the disease. For this reason, Han and Tang will administer more than 110 people on the site. Column home isolation.

Hantang General Manager Chen Baichen confirmed that Hantang conducted quick screening and PCR tests on more than 110 people on the entire site, and a total of 3 employees were diagnosed; on June 1, TSMC stopped work at the P8 project of Baoshan 12 factory to carry out comprehensive disinfection operations, and the test was negative at the same time. More than 110 employees are isolated at home or stayed in epidemic prevention hotels.

Chen Baichen said that Hantang dispatched other projects with a total of more than 30 employees, together with colleagues at home isolation and remote control construction sites, to ensure that the P8 project of Baoshan 12th factory would not be interrupted.

Migrant workers are hard to prevent

Since the beginning of this year, Taiwan’s semiconductor industry can be said to have “leakage in the house even with continuous rain”: from earthquakes, fires, lack of water and electricity to the current epidemic infection and vaccine crisis, it is not peaceful at all.From the current point of view, Taiwan's water shortage and power shortage have recently eased due to rainfall. The biggest concern is that the spread of the epidemic has caused companies to suspend production and work. In fact, since the outbreak of the epidemic in Taiwan, major technology companies have basically formulated a series of active anti-epidemic policies, including declining visitors, avoiding face-to-face meetings with suppliers, diverting AB classes to work, starting home work in some offices, and reducing unnecessary gatherings And activities and other measures, but still failed to stop the spread of the epidemic in the science and technology park.Among the various reasons, the biggest variable factor affecting the development of the epidemic situation in Taiwan is the control of the epidemic situation of migrant workers.Over the past 30 years, foreign migrant workers have been a labor dividend that Taiwan has been enjoying for many years, providing sufficient labor supply for various industries in Taiwan.

In 2019, Taiwan media reports showed that the number of migrant workers in Taiwan exceeded 710,000.Semiconductors are a typical personnel-intensive industry. Among them, the proportion of employees in the first-line production is the largest, especially in the packaging process. In terms of cost and willingness to work, migration is more advantageous. This is why many electronics companies in Taiwan choose to migrate. Important reason for work. According to the statistics of the Hsinchu Science Park Administration, there are more than 160,000 employees in Zhuke, Zhunan Park, Longtan Park, Hsinchu Biomedical Park, Tongluo Park and Yilan Park, of which more than 10,000 are foreign migrant workers. Many semiconductor factories, including World Advanced and Global Wafer, have adopted migration.

This point can also be verified from the news reportof the company KYEC, the company thatbroke out in this migrant work epidemic cluster:KYEC has about 2,100 workers, accounting for nearly 30% of the company's total number of workers.On the other hand, the living ecology of migrant workers has laid a hidden worry for the current epidemic prevention of Taiwanese companies. For migrant workers, they live mostly in groups. The residence is usually arranged by a factory or an intermediary company.

There are 5-10 people in a fortress of a few square meters. This also means that one person is infected in the same room and the remaining roommates. All are at risk of being infected. In addition to the living environment, migrant workers also hold regular gatherings, which increases the risk of infection to a certain extent.

Based on the current situation, we believe that the impact of the migration epidemic on Taiwan's current semiconductor industry can be viewed from the following three aspects:

Will migrant workers' infection spread? To other parks?In a report on the 6th, IFC Securities pointed out that a large number of foreign employees employed in Taiwan, China, are highly mobile in Hsinchu, Miaoli and other regions, making the semiconductor industry clusters in this region more vulnerable to risk.The Zhunan Park, where the migrant labor epidemic concentratedly broke out, is located in the northwest of Miaoli County. Zhunan belongs to the Hsinchu Science Park("Bamboo" for short). Bamboo is known as the "Silicon Valley of Taiwan" and is a global semiconductor manufacturer. One of the most densely populated places is also the headquarters of foundry giants such as TSMC and UMC. Whether Miaoli County and the park are connected to each other, hidden dangers breed. What is even more stressful is that most of the factories employ foreign migrant workers, and some even come from the same agency as the confirmed migrant workers of KYEC.

Reduced load operation has an impact on production capacity by a few percent, and it is not easy to transfer orders for short production capacityAfter the mass infection incident occurred, KYEC stopped migrant work after two days of work stoppage, and adopted the method of reduced load to operate. The degree of impact announced to the outside world is roughly between 30% and 35%. Some customers have a tendency to transfer orders for urgent orders, but in the current situation of shortage of production capacity, whether other manufacturers can accept transfer orders is also an important factor.

Howlong will the downtime last?The load reduction operation in a short period of time is acceptable, and the subsequent factories may increase efficiency to make up for the previous drop slightly. However, if the work is stopped for a long time, the coverage of the impact of capacity will be expanded and cannot be made up. Taking KYEC as an example, it is mainly in the packaging and testing link of the electrical industry chain. From the perspective of its over 50% test service proportion, if it cannot be restored in a short period of time, it will inevitably affect the shipment of finished chips, which is already in short supply. The chip supply market adds another fire.Judging from the current situation, various departments in Taiwan have stepped up prevention and control, and began to deploy migrant factories and dormitories to carry out quick screening work. The specific effect remains to be seen.

If the Taiwan epidemic fails

The global semiconductor industry may be violently attacked

In the first half of this year, Europe, the United States, and Japan sought help from Taiwan due to the lack of “cores” in automobiles. Foreign media pointed out that Taiwan occupies the “life gate” of the global semiconductor industry chain, which shows its importance in the semiconductor industry chain.The Nikkei Shimbun pointed out that Taiwan provides more than 60% of the world's semiconductors. If it stops shipping, it will have an impact on the world.Taiwan of China occupies a pivotal position in the global semiconductor industry chain. High barriers drive the high concentration of the foundry industry, ranking first in the global market in the field of foundry and packaging and testing, of which foundry is more than 60% , The packaging and testing market accounted for more than 30%. In addition, 85% of the world's high-end chips are manufactured in Taiwan, which is critical to the supply of high-tech products.Specifically:

At present, the epidemic situation in Taiwan continues to escalate, and major technology companies have burst out epidemics one after another. The trend of the epidemic affects the hearts of people in the industry."Including TSMC, UMC, AUO, Innolux, and a bunch of components and Netcom factories are all located in Zhuke. Once the epidemic expands and shuts down production, it is not only Taiwan that will be affected, but the global technology industry. The big tech boss shook his head and said."After the KYEC accident, everyone was very nervous, and they were afraid that the epidemic would hit the park. Everyone was in contact. Can the employees be screened quickly?" A frightened bamboo industry practitioner revealed his feelings these days.