Malaysia's epidemic situation increases control, Yageo and Walsin receive transfer orders

As the epidemic in Malaysia continues to spread, the authorities have once again stepped up control measures. On the 8th, it was announced that all enterprises in the "Senai Industrial Zone", a major passive component production center in the country, would be shut down for two weeks starting from the 9th, affecting the supply of passive components in the peak season of the global electronics industry. Taiwanese manufacturers Yageo and Walsin Technology have received orders for transfers. Taiwanese technology giants with production bases in Malaysia have recently suspended operations in some factories in response to local epidemic prevention requirements, and have also made different arrangements to reduce the impact.

In response to the epidemic, Malaysia previously extended the nationwide lockdown to an indefinite lockdown, but factories were allowed to retain 60% of their workforce to operate. On the 8th, control measures were further enhanced. All companies in the "Senai Industrial Zone" were notified first and will suspend operations for two weeks starting from the 9th. Relevant controls may be further expanded to other industrial zones in the future.

Malaysia is a major global passive component production center, including the world's largest MLCC manufacturer Murata, the fourth largest MLCC manufacturer Taiyo Yuden, and the world's top two aluminum capacitor manufacturers Nippon Chemicon and Nichicon, the second largest tantalum capacitor manufacturer AVX, and the solid-state capacitor leader Panasonic. These international giants all have bases in Malaysia. Now that the epidemic in Malaysia is still spreading, factories in industrial zones are facing shutdowns one after another, which has a great impact on the overall supply of passive components.

Regarding the epidemic in Malaysia, Huaxin Technology Chairman Jiao Youheng said on the 9th that the factory of its Malaysian subsidiary Kamaya is located in Perak, where the epidemic is relatively stable, and restrictions have been relaxed, which has a very small impact on production capacity. Huaxin Technology Vice Chairman Gu Lijing said that some orders have been transferred and will continue to be observed for a few weeks.

GlobalWafers, a semiconductor silicon wafer giant, also has a base in Malaysia, but no response was received from the company as of press time. Industry insiders believe that after careful consideration, the Malaysian government still maintains the exclusion clause for the semiconductor industry, so the production situation of local related companies should not change much from before.

GlobalWafers' Malaysia plant is mainly responsible for the slicing business of 6-inch silicon wafers, which does not account for a large proportion of the company's total output value. In response to the Malaysian government's policy, the company recently mentioned that indirect employees in the local office will work from home, while production line employees will continue to work in the factory, so the products and output are almost unaffected.

As for ASE Technology Holding's factory in Malaysia, it continues to operate. The factory mainly serves a large customer base in the communications, computer, industrial and automotive electronics markets, including packaging and testing products such as QFP, TQFP, BGA, SOIC, SOJ, PDIP and camera modules. In recent years, benefiting from the growth in demand for automotive electronics, its operating performance has also grown steadily.

In addition, the Malaysian subsidiary of Precision Technology will comply with the policy and will resume work at a reduced capacity on the evening of the 10th. OEMs Wistron and Inventec have different strategies to reduce the impact.

ELNA, a subsidiary of ELNA in Malaysia, announced on the 3rd that it would suspend operations until the local government approved the resumption of work. However, while fully cooperating with the local government's latest epidemic prevention regulations and measures, ELNA received local information on the 8th that the Malaysian subsidiary is expected to partially resume work early on the 10th.

Jingchengke pointed out that with the approval of the local government, it can partially resume work at 22:00 on the evening of July 10, and it is expected to restore 60% or 80% of the production manpower. The actual situation is still subject to further official notification. However, the progress of applying for resumption of work has been faster than originally expected. In addition, if customers have urgent orders or urgent needs, overseas factories can still be dispatched to support related production. It still depends mainly on customer demand.

As for assembly plants, Inventec said that because there are other production bases that can provide support, customers can choose to ship from other production sites, so the impact is limited. Inventec's Malaysian plant mainly produces mobile device products, and mobile devices account for a small proportion of Inventec's revenue, so the impact is not significant.

Wistron said that its Malaysian factory belongs to the key high-tech industry and is still maintaining normal operations. Although the extension of the lockdown measures will affect shipments, the impact on overall operations is expected to be limited.