Extreme winter weather in Texas is impacting many supply chains. (Photo by Montinique Monroe/Getty ... [+]
The harsh winter weather and ensuing electrical power crisis in Texas will exacerbate supply chain woes in many industries. It is another hit to an auto industry that was already facing a shortage of semiconductors, but the disruptions go beyond that. Because of its geographic location, a lot of intermodal freight passes through Texas as well, and this will likely impact many other sectors.
Austin, TX is the home to several important semiconductor fabs. Samsung has a large foundry that produces an estimated 90,000+ wafers per month, making a range of logic and flash memory chips using technologies as advanced as 14 nm. This makes it one of the largest capacity and one of the most advanced fabs in the U.S.. NXP Semiconductors
Texas Instruments
Starting these fabs back up is more than just a matter of turning the power back on. Semiconductor chips are made with complex manufacturing processes that have hundreds of steps, and almost all of them require precise control of things like operating temperature. The manufacturing tools will have to be stabilized and the restart will take time. It will be challenging to avoid some yield loss during the process.
The weather and power outages have also had a major impact on rail traffic that is critical for many supply chains. Earlier this week the Union Pacific Railroad
These weather disruptions highlight the dependency of modern manufacturing on complex supply chains and the logistic networks that connect them. We tend to take them for granted until something like the winter storm and power crisis highlight how vulnerable we are.