Owing to the worsening pandemic in Malaysia, industry insiders have revealed that a chip packaging facility in the city of Muar has been closed. It is widely speculated that the facility belongs to STMicroelectronics, which owns the only major packaging facility in Muar. Malaysia has been crucial to the global semiconductor industry, with approximately 50 companies setting up packaging facilities in the country, accounting for 13% of the global market share. Among these companies are NXP, Infineon, Broadcom and Texas Instruments.
If confirmed, the closure would further impact the global chip shortage crisis.
According to Jean-Marc Chery, the CEO of STMicro, the average price of STMicro chips has increased by 5% in 2021 from a year ago, and the company expects further price increases in 2022. In fact, Chery has been pessimistic, convinced that the shortage crisis wouldn’t come to an end before the first half of 2023. So far, STMicro can only meet 70% of total customer demand this year, according to Chery. With the group’s plan to boost production capacity, it can meet 85-90% of customer demand by next year. With the speculated shutdown in Malaysia, things might once again fall into uncertainty.