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Taiwan’s top chip tester, King Yuan, shuts down production and quarantines workers

Taiwan was COVID-free for almost a year. Now the virus is out and edging towards major silicon production centres

The world’s leading provider of chip testing services, Taiwan’s King Yuan Electronics (KYEC), has suspended production for two days due to a COVID-19 outbreak among the company’s foreign workers.

Taiwan’s Ministry of Health and Welfare announced all related foreign workers are to be placed on quarantine with pay as COVID tests are rolled out to all of KYEC’s 7,300 employees. The government is assisting with testing and has opened 18 screening lines, servicing a total of 350 to 500 people per hour.

At least 206 workers associated with the cluster have been identified so far, according to Health Minister Chen Shih-chung.

KYEC boasts the second-largest testing revenue for the semiconductor backend supply chain industry, supplying wafer probing, product testing and assembly services to the likes of Qualcomm, Intel, Nvidia, Mediatek and Novatek.

According to Nikkei Asia, KYEC estimates the suspension will result in between four and six percent change in June revenue and output. The company plans to make up for lost production by running the lines “super hot.”

KYEC's woes come at the worst possible time for the semiconductor industry as a worldwide shortage challenges both the electronics and automotive manufacturers and contributes to geopolitical friction.

The production halt is a first in Taiwan, which went months without community transmission of SARS-CoV-2 until an outbreak started in May and led to 8,000 cases. Before the May outbreak the island nation reported a total of almost 12,000 cases.

The country’s recent outbreaks were centered in Taipei, but have spread to Miaoli, which is home to KYEC, and other chipmakers including also the home of Greatek Electronics and ethernet switch maker Accton Technology Corp. As of Friday, Greatek Electronics has reported nine infections and began testing its 4,000 employees over the weekend.

The outbreak has also reached Hsinchu, home to the world’s largest chipmaker, TSMC, which pulled in 55 percent of semiconductor market share in Q1 2021.

Thankfully, cases in Hsinchu have remained low. According to Reuters, the city's mayor has ordered the largely Filipino, Indonesian and Vietnamese foreign workers population not to rotate into other factories or travel to other parts of the island.

This is not the first time a nation's outbreak has disproportionately affected foreign workers, a population that tends to live in crowded conditions and close quarters. Outbreaks last year in Singapore’s migrant worker population at one time accounted for 93 percent of 58,000 of the city-state’s official cases. ®

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