Samsung’s chip production in China faces disruption due to Korean truck strike

Samsung Electronics Co Ltd’s chip production in China is facing disruptions due to a truck drivers’ strike in South Korea that is blocking the export of a key material, the Korea International Trade Association (KITA) said on Tuesday.

This is the first concrete sign that the week-long strike is affecting chip production, which has already cost the South Korean industry more than $1.2 billion in lost production and missed deliveries.

According to KITA, a Korean company that produces isopropyl alcohol (IPA), a raw material used to clean chip wafers, is experiencing problems supplying it to a Chinese company that in turn supplies wafers to a Samsung Electronics factory in China.

According to a statement from KITA, there were delivery delays of about 90 tons or one week.

Samsung Electronics did not initially comment. The company produces NAND flash memory chips at its plant in Xian, China, which are used to store data in data centers, smartphones and other technical devices.

The truckers’ union announced in a statement on Tuesday that it would continue its general strike and condemned the Ministry of Transport for being “neither willing to talk nor able to resolve the current situation”.

The union is protesting against rising fuel prices and demanding guaranteed minimum wages. Four rounds of negotiations with the government have so far failed to produce a compromise.

Samsung’s Xian plant experienced production disruptions earlier this year due to COVID-19 restrictions in the Chinese city, causing NAND prices to rise worldwide.

The technology giant operates two production lines in Xian to manufacture advanced NAND flash products, which account for about 43 percent of its total NAND flash memory production capacity and 15 percent of its total global production capacity, according to TrendForce.