Stray Balloon Triggers Chip-Making Outages at German Plants
Infineon Technologies AG and Robert Bosch GmbH were forced to halt key chip factories in Germany after a power failure, potentially exacerbating a global semiconductor supply crunch.
The city of Dresden suffered a large-scale power disruption for 20 minutes from around 2 p.m. on Monday, shutting down Infineon’s factory there until Tuesday evening, a spokesperson said. While Bosch managed to restart operations by late afternoon on Monday, the company said it’s still assessing the damage at its 1 billion-euro ($1.2 billion) factory. GlobalFoundries Inc. said impact at its Dresden plant was limited because of on-site energy supply.
It’s an inopportune time for such an incident. Carmakers are still struggling to secure supplies of components such as microcontrollers and power management chips. Infineon Chief Executive Officer Reinhard Ploss said last month that the worldwide chip shortage is likely to drag into 2023.
“There are big logistical challenges that we’re seeing right now -- shipping costs are getting much higher, we’re seeing port shutdowns in China and other places that are trying to control the spread of Delta,” Sanford C. Bernstein analyst Stacy Rasgon said, referring to the coronavirus variant. “It’s just a big hot mess.”
Infineon’s Dresden plant makes more than 400 different parts that are used across its product range, including automotive chips. The campus in the eastern German city is one of Infineon’s largest and most advanced production sites.
Bosch opened its Dresden chip factory in June amid broader efforts to make Europe less dependent on imports from Asia or the U.S. The site, which covers about 14 soccer fields, was built to make chips for electronic tools as well as auto parts. Neither Infineon nor Bosch quantified the impact of the shutdowns.
GlobalFoundries’ Dresden factory, which employs some 3,200 people, is largely protected from grid disruptions by two energy facilities on site. Still, there has been “some limited impact” as these stations don’t cover 100% of production, said Erica McGill, a company spokesperson.
The event “has strengthened our resolve to become completely independent of the public grid during the next five years,” McGill said by email.
©2021 Bloomberg L.P.