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Here We Go Again: Chipmakers Reduce Production Due to New Lockdowns

The global chip shortage wouldn’t come to an end too soon, and unfortunately, this is no longer just a forecast but an actual fact.
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Global chipmakers are once again struggling with government restrictions caused by the new wave of the health crisis, with Samsung and Micron two of the biggest names to announce reduced production.

More specifically, both companies claim their operations in China are severely impacted after the new lockdown imposed by the local government in the northwestern city of Xi’an.

Samsung has already confirmed in a statement that it adjusted its operations in the region, though the company says this measure is only temporary. In other words, Samsung hopes the lockdown to be lifted rather sooner than later, so it can then increase the chip production output to normal levels.

Micron has also acknowledged the production challenges in a statement, explaining that in order to comply with the government requirements, its local operations reduced the number of employees. As a result, the whole thing also temporarily takes place though Micron confirms that some delays in the chip supply could be recorded.

Samsung is making NAND memory chips at its Xi’an plant, while Micron is building DRAM memory chips. Most are used for computers, tablets, and phones, but given Samsung and Micron are two of the largest chipmakers across the world, their struggles could eventually affect other industries as well.

In the meantime, carmakers are also preparing for a new chip shortage wave. Expected to take place in the first months of this year, the new chip supply problems are obviously the result of the ongoing global health issue, as fabs are forced to reduce the workforce, lower the production, or even temporarily close some factories.

It remains to be seen if the industry ends up getting hit as hard as in 2020 and 2021, but everybody expects the chip shortage to at least show some signs of recovery towards the end of the year.


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