Fresh Covid cases can further worsen chip crisis in Asia: Report

The auto industry in Asia is already reeling under pressure due to the second wave of the Covid-19 pandemic. Another fresh wave of the pandemic in the continent can further worsen the global chip crisis, claims a report by Wall Street Journal.

The vaccination drive in Asia is still in its early stages. This is further increasing the risk of another wave of the Covid-19 pandemic. Taiwan is one of the key microchip manufacturing hubs in the world. It is currently witnessing a surge in the fresh Covid-19 cases.

The outbreak of the new Covid-19 cases has hit chip manufacturing in Taiwan. According to the WSJ report, at the King Yuan Electronics Co, one of the largest chip testing and packaging companies in Taiwan, over 200 employees have tested positive for the Coronavirus in June 2021, while another 2,000 workers have been placed in quarantine cutting the company's revenue this month by roughly a third.

However, another major chip manufacturer TSMC that makes microchips for many big tech companies around the world. Previously a study by Gartner suggested that the global chip crisis will persist through 2021 and is likely to recover to normal levels only in the second quarter of 2022. However, the new Covid crisis might lengthen the shortage further, impacting the auto industry.

The chip factories in Malaysia have had their manufacturing capabilities slowed due to the Covid-19 pandemic. The lockdown due to the pandemic is expected to reduce chip production in Malaysia by up to 40%.