In recent news, it has been reported that Samsung’s plant in Austin Texas, which is responsible for the manufacturing of 5G tech, display, and logic devices is unlikely to reach optimal production before the end of this month.
According to sources, the plant’s S2 line is responsible for manufacturing these products. And since it is now reported that the components currently being shipped from the plant are too less considering the required output. As such it will result in the reduction of global smartphone output by 2% in the second quarter of this year.
Analysts estimate that one-third of the S2 line’s output is for Qualcomm’s Radio Front-end components for fifth-generation (5G) smartphones. And as we have reported earlier, Qualcomm is experiencing a shortage in their chip supply, owing to the constraints caused in Samsung’s Texas facility. The devices which depend upon Qualcomm will experience a 30% production drop during the upcoming quarter.
But, since the 5G modem component shortage is much visible, the companies have a steady supply of the 4G technology. as such, the device makers are expected to increase their 4G device output as a response to the 5G component shortage, thus it is also believed that the overall global handset production will not drop by more than 5% in the upcoming quarter.
Coming to the display components, one-fifth of the S2 line’s output is for display components, including those used by Apple Inc for its latest iPhones. But since Apple’s peak selling season is over and it even plans on discontinuing its smartphones, the shortage is unlikely to affect the Cupertino tech giant’s smartphone output.
We already know that the shortage of chips has become a global issue and also that it has severely crippled the automakers. But, still, the fact remains that the issue isn’t going to be cleared anytime soon. And also that major carmakers in the U.S. are forced to shut down production.
The recent power outage in Texas which caused suffering for thousands of residents has also created doubt in Samsung’s mind for a new chip facility in the U.S. The company plans to produce semiconductors manufactured through the 3nm process node with this facility and it is currently negotiating with Texas officials for tax breaks close to a billion U.S. dollars spread over 20 years. But, the global chip constraints seem to be getting in the way of the negotiations.