Samsung reopened its Austin, Texas-based semiconductor manufacturing facility, Line S2, on Tuesday after more than a month of downtime. The South Korean conglomerate took the site offline in mid-February after a major winter storm overtaxed the region’s power grid.
The firm stated the plant is currently running “close to normal levels as of last week.”
However, TrendForce, a market intelligence provider, estimates the factory’s inactivity will negatively affect smartphone production on a global scale.
The Global Impact of Line S2’s Downtime
According to TrendForce, Samsung assigned 65 percent of Line S2’s capacity to fabricate Qualcomm-designed 5G radiofrequency chips and its display and image sensor components. Because of its downtime, the organization estimates worldwide handset manufacturing will decrease by around 5 percent during the second quarter.
The organization also predicts the facility’s shutdown will curtail the proliferation of 5G mobile devices this year.
Park Sung-soon, a Cape Investment & Securities analyst, explained the factory’s closure would have had an outsize effect on the industry because of the global semiconductor shortage. He noted the plant’s layoff would exacerbate smartphone manufacturers’ difficulties sourcing parts amid the worldwide crisis. He expects the supply disruption to result in fewer devices than predicted being made in the second half of 2021.
Industry insiders previously indicated Line S2’s temporary connectivity would negatively affect the availability of PMICs, logic chips, and NAND/SSD controllers.
Brief Shutdown, Big Losses
As of this writing, Samsung has not issued an internal estimate for the plant shutdown’s financial impact. However, several analysts have pegged the conglomerate’s losses in the nine-figure range.
Earlier this month, Business Korea predicted the facility’s closure would cost the company ₩100 ($88.7 million). Along similar lines, the Korea Herald’s sources anticipate its losses will exceed ₩300 billion ($265 million). Reuters reported an analyst expects the corporation to report a ₩300 billion to ₩400 billion ($265 million to $353 million) shortfall in its first-quarter earnings.
In 2020, Samsung’s Austin complex generated ₩3.9 trillion ($3.458 billion) in revenue.
Infineon Technologies and NXP Semiconductors also closed their Central Texas-based chip factories in February.
Although those providers have since reopened their plants, both believe the weather-related shutdown will hurt their income. Infineon figures it will sustain a multimillion-euro hit because its Central Texas fab went dark for one week. NXP estimates its multi-week facility layoff will shave $100 million off of its bottom line.
Why It Takes So Long to Reactivate a Semiconductor Fab
NXP recently posted an article detailing the intricacies involved in abruptly closing and restarting its Austin facility.
The chipmaker noted that it normally takes one week to idle a silicon wafer production site safely. Unfortunately, the sudden onset of the winter storm that hit Central Texas last month meant it had to adjust its procedures. After losing outside power, the company’s engineers ensured its backup generators could keep its massive chemical and gas tanks stable.
NXP also had to switch to using diesel fuel once the local utility provider shut off its natural gas supply.
The firm assigned 20 workers to monitor the facility 24/7 during its downtime to keep an eye on its fabrication machinery. In late February, its workers verified the factory was safe to enter, and the restart process began. Its team members meticulously inspected its finished wafers, wafers-in-progress, and nearly 1,000 pieces of manufacturing equipment.
Ultimately, NXP determined some of the plant’s equipment and infrastructural components sustained damage and needed to be replaced. That involved the company removing the site’s roof to remove several 1,000-pound air handler units. The firm brought the complex back online after establishing its output would meet its quality standards.
Samsung and Infineon undoubtedly had to take similar painstaking and time-consuming measures to reactivate their fabs. Given the circumstances, it is impressive the three chipmakers got the factories up and running so quickly.