Texas power outage hits semiconductor industry: Taiwan’s UMC stock up 1.04%

United Microelectronics Corp (UMC: TWSE 2303) stock rose 1.04% today after power shortages in Texas led to a shutdown in semiconductor manufacturing plants in Austin.

The Texas shutdowns will exacerbate the global shortage in semiconductors, the Financial Times reported.

Austin’s local electricity supplier Austin Energy told manufacturers to reduce or completely halt operations after a winter storm swept through the state, bringing record low temperatures, snow, and rolling blackouts that left millions of Texans without power.

Samsung electronics halted operations Tuesday, with no clear timeline for resuming production, according to the Financial Times. NXP and Infineon, also confirmed they had shut down their Austin plants, the report said.

Asian suppliers will benefit from the shutdown, according to an unnamed foreign fund manager quoted in Liberty Times. 8-inch foundries will have better bargaining power, in particular UMC, the report said. The target price for UMC has been raised from NT$52.3 to NT$62, after the price almost breached the NT$60 mark in trading today, the source told Liberty Times.

Samsung’s foundry in Austin has a capacity of 100,000 wafers, which accounts for 30% of the company’s 12-inch capacity, while NXP has two 8-inch fabs in Austin, mainly automotive MCUs, and Infineon owns an 8-inch fab in Austin, which mainly produces automotive/industrial MCUs and NOR Flash.

UMC stock closed at NT$58.20 today, after the previous close of NT$57.60. Early Trading saw the stock price reach a daily high of $NT59.40 before noon.

In contrast, Taiwan Semiconductor Manufacturing Company (TSMC: TWSE 2330) was down 0.45% at NT$660 at the close, after reaching a daily high of NT$665 compared to the previous close of NT$663. The TSMC stock price may have been affected by profit taking after a sharp rise of 3.54% yesterday, Wednesday.

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