Samsung, Micron issue warning over Xi'an virus impact

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Samsung, Micron issue warning over Xi'an virus impact

BEIJING, China: The spread of Covid and lockdown requirements in the Chinese city of Xi'an is threatening to slow the output of critical microprocessing chips.

Two of the largest chip makers, Samsung and Micron, have issued a warning. Xi'an has had to adjust operations due to one of the worst outbreaks of the disease in China, according to company officials. The government has taken sweeping measures on par with restrictions put in place in Wuhan, the epicenter of the pandemic.

Industry observers have noted that any slowdown in manufacturing microchips would limit the supply of many electronic products, as well as new cars.

Samsung announced this week that it would temporarily adjust operations in Xi'an. The company officials said that protecting its workers is its top priority and that it plans to take all necessary measures, including leveraging our global manufacturing network, to make sure that our customers are not affected. Samsung has invested more than $10 billion and has a workforce of over 3,300 people in Xi'an.

The Korea Economic Daily reports that Samsung's chip output in Xi'an accounts for over 40 percent of its total global production of memory chips used in smartphones, tablets and hard drives.

American chipmaker Micron acknowledged at the same time that the lockdown in Xi'an could reduce the production of its DRAM memory chips, which are needed in the manufacturing of computers. Micron officials said they have reduced their workforce in Xi'an.

Micron warned that there may be some delays as they activate our network, because they are using their global supply chain, including our subcontractor partners, to meet the demand for chips. The company said that new or more stringent restrictions impacting our operations in Xi'an may be more difficult to mitigate.

Xi'an, with a population of 13 million, reported 1,117 cases of Omicron infections.