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Samsung, Infineon, and NXP Halt Production in Texas due to Winter Storm


Samsung Electronics, Infineon Technologies, and NXP Semiconductors closed their Austin, Texas area factories recently because an intense winter storm overloaded the state’s power grid. The chipmakers paused their manufacturing work at the local energy provider's request so it could better support nearby residences and healthcare facilities.

Raymond James, an international investment bank, expects the shutdowns to exacerbate the global semiconductor shortage. As of this writing, none of the affected companies have offered estimates for resuming production.

Severe weather conditions started causing extensive power outages throughout the region on Monday. The Electric Reliability Council of Texas, which manages the state’s power grid, hopes to restore partial service to residential customers by Thursday.

Applied Materials, Qorvo, and Texas Instruments, and other providers maintain manufacturing plants in Texas but have not announced any factory closures.

FedEx, United Parcel Service (UPS), and the United States Postal Service (USPS) have closed their local hubs and warned of shipping delays because of the adverse weather conditions.

Samsung, Infineon, and NXP Shut Down Plants

On Tuesday, Samsung shuttered both of its Austin factories at the behest of local electricity provider, Austin Energy. Citibank estimates the two plants represent around 28 percent of its total production capacity. Raymond James noted the affected facilities utilize older manufacturing nodes. That means the conglomerate’s production of Qualcomm smartphone processors and Nvidia graphics cards should not be impacted.

However, Samsung stated the chip shortage could curtail its smartphone output in late January.

NXP also idled its two Austin-based manufacturing centers due to the storm and notified its impacted customers about potential supply disruptions. Last month, the firm raised prices across its catalog because of the supply crunch and a sharp increase in its raw material costs. The car component maker’s Texas fabs represent approximately 30 percent of its production footprint.

Similarly, Infineon stopped work at its Austin factory after being alerted to the area’s power supply problems. According to Citi analysts, the firm primarily uses the plant to make memory modules for its automotive and industrial clients. It previously declared meeting demand for vehicle components is difficult since foundry capacity is constrained.

All three semiconductor companies pledged to resume normal operations as soon as possible.

Other Chipmakers with Facilities in Texas

Although only Samsung, NXP, and Infineon have announced plant closures, several other chipmakers operate manufacturing facilities in Austin and other parts of Texas. However, none of them have publicly declared any work stoppages related to the region’s weather conditions.

Applied Materials maintains a large campus in Austin that includes over 300,000 square feet of production space. The facility is one of four production sites the corporation has in the United States.

Skorpios Technologies, a New Mexico firm, has a clean room the size of a football field in the city.

Flex manages five manufacturing centers in Texas, three of which are located in the Austin area and make vehicle parts. Its other two complexes, based in the Dallas-Fort Worth area, fabricate components for the healthcare industry. North Texas is currently suffering extensive power outages because of the weather crisis.

Texas Instruments has five chip plants in its home state: three in Dallas, one in Sherman, and another in Richardson. Local media outlets reported Sherman is dealing with rolling blackouts while Richardson’s electricity provider has initiated controlled outages. Similarly, Qorvo has a design, manufacturing, and sales complex in the latter city.

Tronics Microsystems, a TDK Corps. subsidiary, operates a wafer fab in Addison, an area dealing with residential blackouts. X-Fab, a specialty foundry, has a facility in electricity disruption-afflicted Lubbock.

Logistics Providers Feel Impact

The extreme weather conditions battering Texas have also hit other parts of the United States, prompting widespread logistics problems.

FedEx told the New York Times the winter storm created “substantial disruptions” at its central facility in Memphis, Tennessee. As a result, the service indicated its domestic deliveries could be delayed.

UPS warned customers that severe meteorological conditions had impacted its U.S. network now. The firm noted that packages moving through its system may arrive later than anticipated because of the current conditions. The company operates one large facility in Dallas and its main hub in Louisville, Kentucky, a region under a winter weather advisory through Friday.

USPS announced it shuttered processing hubs and post offices across the United States in response to the storm. The agency issued business delivery service interrupted alerts for Alabama, Arkansas, California, Georgia, Illinois, Louisiana, Massachusetts, Mississippi, New Jersey, and South Carolina.

DHL has not provided an update regarding its services in America.

The National Weather Service expects the devastating winter storm disrupting life throughout the U.S. to continue through February 20.