News & Analysis

COVID-19: Suppliers report supply and delivery issues

23rd March 2020
Mick Elliott

Component suppliers have been delivering regular updates to customers on the impact of COVID-19. Some are reporting plant closures and delivery problems, though it is clear all are striving to keep customers supplied as best as possible.

ST Microelectronics says it does not foresee any front-end fab closuresdue to the COVID-19 outbreak.

Its wafer fabrications facilities in Agrate and Catania in Italy, Rousset, Crolles, Tours in France, as well as in Singapore, are all operational.

NXP Semiconductors says it continues to experience constraints with two burn-in subcontractors supporting a subset of NXP products manufactured in NXP’s Tianjin, northern China facility.

These constraints are caused by a slower than planned ramp-up of production from the Lunar New Year holiday resulting from travel restrictions and quarantines imposed by authorities in response to the virus

NXP continues to monitor its logistics network daily. Global Parcel Network is operating with minimal delay. UPS, FedEx and DHLE are experiencing intermittent 1-2-day delays.

The semiconductor maker says that delays of 3-5 days should be expected for larger heavyweight air shipments due to a reduction in commercial airfreight capacity, the expanding list airlines cancelling flights to a growing list of countries and freight backlog at key hubs. NXP is working hard to find alternative logistics routes and other solutions to minimise disruption.

Yageo’s output has been badly affected.

High demand for its passive components since the second half of last year has left Yageo with low inventory levels. And with labour limited in China despite the gradual lifting of government restrictions, Yageo says it will not be able to increase inventory levels with the currently limited workforce. The company also cited the high cost of labour, logistics, and material.

It stated, “The cost has been increased tremendously, namely labour, freight charge, material and low utilisation in order to maintain the factory operations. Under such challenging circumstances, Yageo is making all the necessary actions to recover the capacities of our factories in both of Suzhou and Dongguan while our factories in Kaohsiung are running normally to reduce the impact. “

AVX says that 29 of its facilities are in operation.

“We were notified from the Malaysia government that our Penang facility has to close March 18thto March 31st. Even though we do expect an impact out of this closure, we do have alternative manufacturing capabilities available and will update our valuable customers on a regular base on their order backlog.”

“Known shipping limitations, especially from Europe to Asia and to U.S., which are beyond our control, are leading to delays,” Infineon told customers.

“We are not facing a stop of supply. We are working day-by-day on updating and improving the situation. Our facilities located around the world, are fully operational. They have already installed their response teams, who are continuously monitoring the local situation. Risk mitigation measures are implemented. Infineon does not make any compromises regarding product quality. All process and product test procedures remain unchanged,” said the company.

Molex’s Luzon facility is in a quarantine zone in the Philippines and the company and is closed from 17 March 2020 through 13 April 2020. The company is evaluating the impact of this quarantine on our Philippines operations which is located within the area of restriction but expect to qualify for an exemption for export-oriented industries.

We will provide an update once we complete our evaluation of this quarantine on our Philippines operations. Malaysia –The Malaysian government has issued a nationwide

A Movement Control Order which runs until 31 March 2020 has impacted Molex operations in Malaysia, though it expects to qualify for an exemption for electrical and electronics products.

We will provide an update once we complete our evaluation of this quarantine on our Malaysia operations.

The good news is that its operations in China have restarted operations and Molex expects to be back to full production in all plants by the end of March.

It warns of delays for some orders based on the slower return to full staffing levels at some of our manufacturing locations and suppliers.

At present production is normal at all other manufacturing sites in Asia with increased employee safety measures being implemented. And we are closely monitoring Southeast Asia for any new developments.

At presents its north America manufacturing sites are open. In Europe manufacturing sites are operational, although experiencing an increase in absenteeism, especially in Italy.

Analog Devices is facing supply disruptions in Malaysia, Philippines, Singapore, and the US (Milpitas, California) due to government actions that are reducing factory operating levels and limiting people movement in order to control the spread of COVID-19.

These actions limit capacity for both ADI’s internal test and external test and assembly partners.

“This situation is dynamic,” says the company, “and we are actively working to improve our supply capacity and resilience within these evolving constraints. We are currently assessing the impact of these constraints on our plans to fill customer orders.”

“In many cases, our existing finished goods inventory will be able to service immediate orders, while new supply will be constrained below pre-COVID-19levels for three to five weeks. We expect to have these constraints modelled in our planning system by the end of this week. As we receive updates about customer demand and ADI supply, we will further adjust these transfer plans and we estimate I twill take approximately 1 week to reach steady state plans,” a company statement continued.

“We continue to monitor evolving governmental regulations and are working with all parties to improve our supply delivery. We are actively deploying more resources and optimising work practices to further improve supply. We face known and unknown challenges ahead, but we are in this together and you have my commitment that ADI will mobilise extra resources and our full capabilities as we navigate these times with you.”

 

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