HOUSTON (ICIS)–The polar wave that swept
through the US Gulf Coast has disrupted supply
chains throughout the country, including
intensifying the
global semiconductor shortage after several
chip manufacturing plants were forced to shut
down.
Samsung shut down its Austin semiconductor
plant due to the recent blackouts in Texas,
after Austin Energy asked all
large-scale manufacturers to shut down to
put residential customers back online.
The company said prior measures were taken to
safely shut down production, although it did
not specify when production will restart.
“We are currently making efforts to resume as
soon as possible, “said Michele Glaze, director
of communications at Samsung Austin
Semiconductor.
NXP, which has two plants in Austin that make
chips for a variety of electronics, including
automobiles said that it was warning customers
of the
potential for supply disruptions.
“We are carefully monitoring the situation and
will resume operations in our Austin facilities
as soon as possible,” said David Reed,
executive vice president at NXP.
Reed said that once power is restored, NXP will
be able to evaluate the impact of the shut down
and when full production will resume.
While chip manufacturing output in the US is
smaller than in Taiwan and South Korea, this
shutdown puts even more strain on the global
semiconductor chip shortage that has slowed
down automotive production.
Chemicals make up about one-third of the raw
material cost of an average vehicle.
The unprecedented freezing temperatures have
also paralysed a significant portion of US
refineries and petrochemical plants in the
region.
The National Association of Chemical
Distributors (NACD) said that many of its
members have experienced supply chain
disruptions, including container ship backups
at the ports of Los Angles and Long Beach in
California, manufacturing facilities shutdowns,
and force majeure notices on products.
“We anticipate these disruptions will cause
tightening in the market for several weeks if
not a month or two as these operations come
back online and regain full operations.
Coupling all of these issues with driver and
truck availability shortages cause us to
believe this next quarter will be difficult for
many,” said Eric Byer, CEO of the NACD.
Specialty chemicals and coatings businesses
could be affected more directly as they will be
exposed to higher raw material costs as a
result.
RPM international already lowered its guidance
for its fiscal third quarter because of
disrupted transportation, distribution and
supply chains throughout North America.
Freight delays and a shortage of truck drivers
is expected to increase the price of
transporting goods.
“We had a facility in Memphis and Dallas which
got completely snowed in. Power problems and
water outages impacted us in those facilities
as well, carriers were unable to pick up orders
that were fulfilled and workers were unable to
get to work,” said Casey Adams, president of
Visible Supply Chain Management, an e-commerce
logistics firm.
He expects a large ripple effect from the storm
with freight prices nationwide experiencing a
tight and erratic market.
“I do not see that lessening, I see the storm
as having made freight prices a little bit
worse,” said Adams.
Focus article by Janet Miranda
Thumbnail image shows an automobile. Photo
by Ng Han Guan/AP/Shutterstock
Visit the ICIS US Gulf Coast polar storm
topic page.
