Taipei: Taiwan’s tech suppliers are grappling with supply shortages, even for things like packing materials, as some struggle to take advantage of rising demand.
Taiwan is a major supplier to the global electronics ecosystem, with parts used in everything from refrigerators and smartphones to cars and missiles.
Comments from a group of key companies in the industry over the past week provide a snapshot of both the opportunities and problems they face: a strong market for products, particularly in automotive and high-end computing, but gaining input. difficulty in, especially from places constrained by the COVID-19 lockdown in China.
Major Taiwanese flat-panel maker AU Optronics (AUO) saw its first-quarter net profit drop by more than half from a year ago.
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While AUO supplies displays for top carmakers, such as Tesla, and high-end notebooks, the materials that threaten to limit its production are at times low-tech.
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“The less important the material, the more we lack. Why? Because their inventory is short, we need a large amount of transportation. But the biggest challenge right now is transportation,” President Paul Peng said in an earnings call. told.
“So don’t be surprised if I tell you that we have the most shortage of cardboard boxes and packaging tape.”
Such materials are usually procured from China, where the lockdown has closed factories and disrupted transportation.
Joseph Tung, chief financial officer of Taiwanese chip testing and packaging firm ASE Technology Holding Co Ltd, said in an earnings call that demand for cellphones and some consumer products appeared to be “relatively weak”.
“But from our point of view, I think the overall situation is still very healthy,” he said. “In terms of high-performance computing, networking and automotive, we still see very, very strong momentum.”
Powerchip Semiconductor Manufacturing Corp, a supplier of power-management chips, has a similar message.
The company’s president, Frank Huang, told a shareholder meeting that, although current demand was not as strong as before, Powerchip Semiconductor’s production capacity was still fully filled.
“Absolutely, there isn’t enough supply for auto chips,” said Huang, whose firm has contracted manufacturing services for logic and memory chips for power management with clients such as MediaTek Inc., Taiwan’s largest designer of chips for mobile phones. provides.
Powerchip is building a new T$278 billion ($9.43 billion) factory in Miyoli, northern Taiwan, which is expected to come online in the fourth quarter.
The same strong demand is also benefiting United Microelectronics Corp., a competitor of Taiwan Semiconductor Manufacturing Co., Ltd., the world’s largest contract chipmaker. United Microelectronics said it was still having trouble meeting customer demand, even as notebooks and smartphones were showing some weakness.
Delta Electronics Inc., a supplier of electrical components to companies such as Apple and Tesla, said it was expanding manufacturing “everywhere”, and was particularly upbeat on electric vehicles (EVs). It also pointed to strong demand for their EV offerings from traditional automakers such as Ford Motor Company and General Motors Company.
“There’s a huge backlog for EVs for Delta and for automakers. The challenge is to balance the content,” Delta chairman Yancy Hai said in an earnings call.
“If you have a shortage of materials, factories can’t work. It’s hard for everyone, but I think that’s the future.”
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