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Covid-19 outbreak at Taiwan chip-testing factory may worsen semiconductor shortage

  • King Yuan Electronics Co shut down its main plant in Miaoli County over the weekend and reported 182 confirmed cases as of June 5
  • Taiwan’s outbreak highlights the threat posed by the global technology supply chain’s reliance on a small number of key players

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Workers are seen inside a chip-testing plant of King Yuan Electronics Co in Taiwan. Photo: Handout
Bloomberg
A cluster of Covid-19 infections at a factory in central Taiwan temporarily stopped operations at one of the world’s largest chip-testing companies, the latest sign of potential disruption to a technology supply chain already struggling from semiconductor shortages.

King Yuan Electronics Co (KYEC) shut down its main plant in Miaoli County over the weekend and reported 182 confirmed cases as of June 5, according to Taiwan’s Centres for Disease Control. Most of those cases were among its foreign workers, including factory floor employees.

The government placed all 2,000 of KYEC’s overseas workers, around 30 per cent of its workforce, into 14-day quarantine, and the company has turned to temporary local workers to get its production lines running again.

KYEC resumed operations last night at lower-than-normal production volumes, said Aaron Chang, acting spokesman of the company. Its shares gained 1.9 per cent on Monday.

The facade of King Yuan Electronics Co’s main chip-testing facility in Miaoli County in western Taiwan. Photo: Handout
The facade of King Yuan Electronics Co’s main chip-testing facility in Miaoli County in western Taiwan. Photo: Handout

“Once migrant workers return to production lines in two weeks, the company will speed up production to make up for its loss,” Chang said. “The company sees no major impact on annual finances and businesses.”

Production capacity and revenue are expected to drop by 30 per cent to 35 per cent in June, KYEC said in a statement to the local stock exchange.

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