In a development that certainly isn’t going to help the ongoing global chip shortage, according to a report from the Austin-American Statesman, Samsung has been ordered to completely shut down its fabs in Austin, Texas, due to power shortages in the state. The unprecedented move also impacts NXP Semiconductors and Infineon Semiconductors, and all of the impacted companies have complied with the order and ceased chip production operations.
Unplanned fab shutdowns can have long-lasting impacts; for instance, a thirty-minute power shutdown in 2018 at a Samsung fab destroyed 3% of the global supply of NAND. Additionally, as seen from an unplanned power loss at Samsung’s Hwaseong plant last month, it can take several days after power restoration for a fab to resume full operations.
The Statesman notes that some products could have been ruined due to today’s shutdown, possibly costing the impacted companies millions of dollars. Some types of chips can take a month or more to move through the various fabrication steps, and unplanned power outages can cause entire production lines of products to be discarded, resulting in significant losses. For now, it’s unknown whether Samsung was given enough notice before the power cut to shut the fabs down gracefully, which would minimize the impact in terms of lost products and speed the resumption of normal operations once power is restored.
Regardless, the impact will obviously stem the flow of chips coming from Samsung’s two Austin fabs. Even relatively short fab disruptions have resulted in long-term shortages and price hikes in the past, which certainly isn’t good news in the midst of the ongoing global chip shortage. Chip production plants do have backup power generators to defray the impact of unplanned shutdowns, but these systems are typically designed to handle short periods of time to enable a graceful shutdown, so they aren’t suitable for long-term outages.
Samsung built its first Austin fab in 1996. The company added a second fab in 2007, which it expanded in 2017. Samsung’s public-facing information doesn’t reveal which products it currently produces at the fabs, though they have historically focused on DRAM, NAND, and mobile SoCs.
Notably, Samsung is in the midst of planning for a new $17 billion fab in the US this year, with Texas, Arizona, and New York in the running for the new plant. Naturally, access to reliable public infrastructure, such as power and water services, is high on the list of criteria.
The Coalition for Clean, Affordable, Reliable Energy, which represents Austin’s biggest electricity consumers, says that Austin Energy ordered all industrial and semiconductor manufacturers to idle or shut down their facilities and that all companies have complied with the order. There hasn’t been a date given for resumption of normal operations at the fabs, but we’re following up with Samsung and will update as necessary.