shortages could worsen as COVID-19 returns to Asia

PS5 shortages could worsen, according to a Wall Street Journal article that worries about the return of COVID-19 in several countries in Asia. Several states like Taiwan are behind on vaccination, and the number of cases continues to grow, suggesting a new wave.

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We know that the component shortage that affects the production of many tech products is expected to continue until 2023. However, an article in the Wall Street Journal warns of return of COVID-19 in several Asian countries and on the probable deterioration of the situation around the production of components for the PS5 and other products in high demand.

South Korea and Taiwan had initially resisted the COVID-19 pandemic better than the others thanks to the very rapid implementation of effective health measures such as masks, social distancing, follow-up of contact cases, the generalization of PCR tests or the implementation of travel restrictions.

COVID-19: Taiwan, Malaysia worried about upsurge in cases

However, in this key phase where vaccines are available, these same countries sometimes lag behind Western countries. In Taiwan, the number of cases has increased sharply since May. One of the largest component factories in the country, King Yuan Electronics Co., is said to have faced more than 200 cases this month, and has to manage, on top of that, the quarantine of more than 2,000 employees. .

A setback that has melted the turnover of the manufacturer by more than a third. TSMC, on which, among others, the manufacture of the SoC of the PS5, Apple chips, and Nvidia and AMD GPUs, is watching the situation with increasing concern. The firm, which has already had to deal with a drop in production due to the severe drought which recently struck the country, is not yet impacted by cases of COVID-19.

But its officials believe that It’s only a matter of time as the bulk of recent COVID-19 cases have occurred “Very close to its headquarters in Hsinchu Taiwan”. At this stage the question is therefore no longer whether the return of COVID-19 in these countries will or will not affect the production of components, but to know to what extent, and when.

Global demand for products like the PS5 remains very strong

Especially since demand for products like the PS5 and Nvidia and AMD graphics cards continues to put pressure on production lines. The launch of new Apple products equipped with an M1 chip, also manufactured by TSMC, should do nothing to relieve the pressure on the manufacturer. Besides Taiwan, problems are also already observed in Malaysia.

Country which already estimates that the production of a major factory will drop between 15 and 40%. Gold, it’s not just the production side. In ports, many cases of COVID-19 are also reported. This can in some cases put the shipments to a halt. As in the enormous port of Shenzhen which surpasses the largest American port in volume by almost 50%.

Port operations would be virtually suspended due to an explosion in the number of cases among dockworkers. 160,000 containers are waiting to be loaded into ships. And the tail should lengthen, while the port is only 30% of its normal capacity and that global demand is not weakening.

After the factories, it is also the ports that are starting to be affected

It remains to be seen how the situation will develop in the coming months. Thanks to the development of vaccination in Western countries, a certain return to normal is starting in some regions of the world. The countries of Asia are nevertheless simultaneously more cautious on the side of measures and slower to vaccinate their populations.

Their governments are in fact prioritizing the total eradication of the virus “Even if it means a sore economy in the short term”. In all cases, the entire planet remains dependent on components manufactured in several Asian countries, which means that they can in any case count on a powerful catch-up effect.

Also read: For Intel, semiconductor shortage could last for several years

What do you think of the return of COVID-19 cases in some East Asian countries? Do you think the shortages will get worse? Share your feedback in the comments of this article!

Source : WSJ

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