The Malaysian semiconductor agency Unisem will shut some vegetation for seven days after three workers died just lately from COVID-19, dealing a recent blow to the chip provides that carmakers and different corporations depend on.

The corporate mentioned it’ll shut Ipoh vegetation within the state of Perak till Sept. 15 to curb the unfold of the illness, which Chairman John Chia mentioned had contaminated a number of workers and brought on three deaths. The corporate will then restrict the variety of employees allowed into the amenities after they reopen. Unisem, which offers packaging and testing companies, will get about 12 p.c of its income from the auto sector, 28 p.c from communications and 30 p.c from client segments.

Unisem is one among a number of massive Malaysian-based chip assemblers and testers for the likes of Infineon Applied sciences and STMicroelectronics. The suspension of its vegetation underscores how COVID-19 is disrupting key parts of a worldwide provide chain already battling insufficient capability, notably for a wide range of low-end chips that automakers from Tesla Inc. to Toyota Motor Corp. require to make their automobiles. The Japanese big mentioned final month it will droop manufacturing at 14 vegetation as a result of suppliers, notably in Southeast Asia, have been hit by new COVID infections and lockdowns.

“Our clients are screaming as we’re important a part of the availability chain,” Chia mentioned in a textual content message, including that the corporate has begun an on-site vaccination program for employees. “We’ll proceed until all our workers, clients, resident engineers and contractors have been vaccinated.”
 

Malaysia has been struggling to include a surge in COVID-19 circumstances, whereas preserving its financial system on observe. New reported infections soared to a peak of greater than 20,000 a day throughout August and have since declined to about 18,000 as vaccinations speed up.

“We anticipate that the gross sales and manufacturing at our Ipoh vegetation [in Perak] will proceed to be adversely impacted within the coming months as a result of headcount limitation till such time the pandemic subsides considerably,” the corporate mentioned in Wednesday’s submitting with the native inventory change.

The closure is projected to chop about two per cent from Unisem’s annual manufacturing, the corporate mentioned in a submitting Wednesday. Unisem was estimated to generate about $360 million (all figures in USD) in income this 12 months earlier than the plant closures, and has a market valuation of about $1.7 billion. Shares have climbed about 38 p.c this 12 months.

Unisem carried out a non-public vaccination program from Sept. 1 to Sept. 3 the place most of its workers obtained their first dose of a vaccine. They’ll keep strict procedures to mitigate an infection, Chia mentioned.