Samsung’s Austin chip plant shutdown will also affect Apple smartphone production

In January 2021, it is reported that the company is investing heavily in foundry operations for advanced logic chips as it seeks to compete more effectively with TSMC.

Earlier, the world’s largest memory chipmaker has requested authorities in Texas to grant tax abatements over 20 years, which would be worth a total of $805.5 million, for its new $17 billion chip facility in Austin.

Furthermore, Samsung shut down its chip plant in Austin, Texas due to power shortages across the state. The company is also making effort to restart the plant as soon as possible. Looking at the damages the South Korean tech firm has donated a sum of $1 million to the community partners in the state.

According to a recent report, that Samsung and Apple smartphone production will be affected by the shutdown of Samsung’s semiconductor plant in Austin, Texas, USA. The Austin plant, which was shut down due to a cold wave last month, produces chips for smartphones from two companies.

The delay in the normal operation of the Austin plant is likely to affect the production of Samsung’s flagship smartphones such as the Galaxy S21 series and Apple’s organic light-emitting diode (OLED) iPhone.

At the Austin plant, it was found that Samsung is producing chips for flagship smartphones sold in the continental Americas (North and South America). The plant also makes a display driver IC (DDI), a chip required to drive the OLED panel of Apple’s iPhone. The production capacity here is known to be 20,000 wafers per month.

The Galaxy S21 series, which aims to recover its honor due to sluggish sales last year, also came into the sphere of influence. In the parts industry, the annual shipment of the Galaxy S21 series is expected to be around 30 million units, 15% more than the previous version.

However, if the chip supply shortage becomes a reality, the shipments of the Galaxy S21 series could only reach the late 20 million units.

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The shutdown of the Austin plant puts Samsung a burden on stably securing chips in addition to product marketing to increase consumer demand. Samsung missed the right time to sell due to a shortage of parts for the top model (ultra) of the Galaxy S20 series last year.

Apple receives the DDI required for the iPhone OLED panel from the Austin plant. If the plant shutdown is prolonged, OLED iPhone production could also be disrupted. Apple is expanding its market share in the premium phone market with sales exceeding expectations for the iPhone 12 series, which was released in the second half of last year.

Meanwhile, Samsung is reportedly conservatively setting an estimate of the Galaxy S21 series shipments (26 million units) this year due to extremely sluggish sales of the Galaxy S20 series last year.

The current industry estimate of the Galaxy S21 series shipments (30 million units) is 15% higher than the previous Galaxy 20 series shipments but far less than the previous year’s shipments of the Galaxy S series, which were in the mid-30 million units.

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