Chip supply faces new crunch as Malaysia plants shut for a week

The Malaysian semiconductor firm Unisem will shut some plants for seven days after three employees died recently from COVID-19, dealing a fresh blow to the chip supplies that carmakers and other companies rely on.

The company said it will close Ipoh plants in the state of Perak until Sept. 15 to curb the spread of the disease, which Chairman John Chia said had infected several employees and caused three deaths. The company will then limit the number of staff allowed into the facilities when they reopen. Unisem, which provides packaging and testing services, gets about 12 percent of its revenue from the auto sector, 28 percent from communications and 30 percent from consumer segments.

Unisem is one of several large Malaysian-based chip assemblers and testers for the likes of Infineon Technologies and STMicroelectronics. The suspension of its plants underscores how COVID-19 is disrupting key portions of a global supply chain already struggling with inadequate capacity, particularly for a variety of low-end chips that automakers from Tesla Inc. to Toyota Motor Corp. require to make their cars. The Japanese giant said last month it would suspend production at 14 plants because suppliers, particularly in Southeast Asia, have been hit by new COVID infections and lockdowns.

“Our customers are screaming as we are vital part of the supply chain,” Chia said in a text message, adding that the company has begun an on-site vaccination program for staff. “We will continue till all our employees, customers, resident engineers and contractors have been vaccinated.”

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