Infineon Plant Downed by Outage Could Worsen Chip Shortage

(Bloomberg) --

One of German auto chipmaker Infineon Technologies AG’s most important manufacturing sites was forced to shut down after a power outage, potentially exacerbating a global semiconductor supply crunch.

The city of Dresden suffered a large-scale power disruption for 20 minutes from around 2 p.m. on Monday, and Infineon’s factory there came to a complete halt, a spokesperson said via email. Production resumed on Tuesday evening. The company did not quantify the impact.

The outage is unrelated to the energy crunch hitting other factories in Europe. A stray foil balloon landed in an electricity substation, got caught between two live conductors and triggered a short circuit that appears to have caused the blackout, Dresden police said in a statement.

It’s an inopportune time for such an incident. Carmakers are still struggling to secure supplies of components such as microcontrollers and power management chips. Infineon Chief Executive Officer Reinhard Ploss said last month that the worldwide chip shortage is likely to drag into 2023.

Read more: VW CEO Fears Chips Will Be in Short Supply for Years to Come

“There are big logistical challenges that we’re seeing right now -- shipping costs are getting much higher, we’re seeing port shutdowns in China and other places that are trying to control the spread of Delta,” Sanford C. Bernstein analyst Stacy Rasgon said, referring to the coronavirus variant. “It’s just a big hot mess.”

Infineon’s Dresden plant makes more than 400 different parts that are used across its product range, including automotive chips. The campus in the eastern German city is one of Infineon’s largest and most advanced production sites.

Robert Bosch GmbH and GlobalFoundries Inc. also operate plants in Dresden. Representatives for the companies didn’t immediately respond when asked whether they were affected by the outage.

(Updates with cause of the outage in the third paragraph.)

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