Chip shortage causes production drop at electronics maker Johnston :: WRAL.com
Smithfield, North Carolina – The global shortage of computer chips is not only delaying the delivery of new cars, appliances and electronic gadgets, but is also affecting the manufacturing industry in North Carolina.
Production at Carolina Electronic Assemblers in Smithfield, which makes a line of components for electronic devices, can stop if a chip or two is missing.
“There are 62 different parts. If I don’t have one, the product doesn’t work. I can’t build it,” said owner Steve Yauch. “They all have to be here.”
But the silicon foundries that provide the basis for most computer chips closed at the start of the pandemic and have struggled to keep up with demand ever since. Some chips that previously took three to four weeks to arrive are now out of stock for up to a year, Yauch said.
At one point, he said, CEA couldn’t get three of the 163 chips for a printed circuit board due to shortages. Thus, a production line that could produce 7,000 circuit boards per day was limited to about 500.
“This is by far the worst, without a doubt,” he said of the current situation. “It took a lot of creativity, a lot of hard work by a lot of people to get the parts we need to keep our customers alive.”
The CEA worked with its customers to redesign the printed circuits based on the chips in stock. Large orders are also now built in smaller lots to meet a customer’s immediate needs.
“It costs us more because we have to constantly set up and take down these configurations for product execution, but we don’t charge the customer for it,” Yauch said.
Manufacturing plants across North Carolina are restructuring production lines to avoid shutdowns, said Phil Mintz, who heads the extension services program for Carolina State University’s College of Engineering North.
“They’re all in a rush,” Mintz said. “They have to work really hard just to get something that they can use on some of their products.”
The ongoing coronavirus pandemic and the resulting labor and supply shortages have created a perfect storm that threatens to raise consumer prices, he said.
“Where there is little supply there are often higher prices. We are all concerned about inflation,” he said. “There are huge challenges in manufacturing just being able to offer their product at prices that they think our consumers will accept.”
Yauch said he expects parts shortages to continue for another year.
“We live in a three-legged world: it’s our suppliers, us and our customers. If one of them fails, we all fail,” he said.