South Korean truckers’ strike disrupts chip supply chain

Seoul — A week-long strike by truck drivers in South Korea has disrupted shipments to China of a key material used in the production of semiconductors, the Korean International Trade Association (Kita) said on Tuesday.

It is the first concrete sign that the week-long strike is affecting the global supply chain of chip production, having already cost South Korean industrial sectors more than $1.2bn in lost production and unfilled deliveries.

Kita said a Korean company that produces isopropyl alcohol (IPA), a raw material for cleaning chip wafers, is facing complications in shipping to a Chinese company that in turn supplies wafers to chipmakers.

Kita said in a statement that about 90 tonnes, or a week’s worth of shipments, have been delayed. It corrected an earlier statement saying production had been disrupted. It clarified that the Chinese company does not supply wafers to Samsung Electronics’ chip production in China.

Samsung Electronics did not immediately comment. It produces NAND flash memory chips, used for data storage in data centres, smartphones and other tech gadgets, at its plant in Xian, China.

The truckers’ union said in a statement on Tuesday it will continue its general strike and condemned the transport ministry for being “neither willing to talk nor capable of resolving the current situation”.

The union is protesting against soaring fuel prices and demanding minimum pay guarantees. Four rounds of negotiations with the government have failed to find a compromise.

Samsung’s Xian plant had seen production disrupted earlier this year due to Covid-19 curbs in the Chinese city, which caused a global firming of NAND prices.

The tech giant has two production lines in Xian making advanced NAND flash products, which account for about 43% of its total NAND flash memory production capacity and 15% of the overall global output capacity, according to TrendForce. 

Reuters