Market Intelligence
September 16, 2021

Large-Scale Power Disruption in Dresden Affects Infineon, Bosch and GlobalFoundries

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On September 13, the city of Dresden, Germany experienced a large-scale power disruption, temporarily halting chipmaking operations at the factories of Infineon Technologies and Bosch. The blackout will likely exacerbate the already-strained global semiconductor supply chain, which is experiencing a significant imbalance as demand grossly outweighs supply scalability. The damage from the outages at each factory is still being assessed and may be minimal thanks to emergency energy sources put into immediate effect.

While the damage has not been quantified yet, Infineon’s site in Dresden is a significant manufacturing facility, making over 400 different parts used across various product-types. Parts in high demand by the automotive sector in particular, like MOSFETs, microcontrollers and power management chips could be impacted. This is in addition to Infineon’s existing misfortunes in production and delivery due to shutdowns at its Malaysia factories, port closures in China and rising shipping costs affecting lead times and pricing for its customers.

Bosch’s semiconductor facility in Dresden is fairly new, beginning operations in July 2021. Reports state the facility momentarily shutdown during the outage on Monday but resumed operations thanks to its emergency power supply. As the world’s largest car-parts supplier, Bosch invested $1.2 billion in its Dresden facility to ramp up supplies and fulfill demand for chips particularly manufactured for the automotive sector. The possible damage due to the power outage is still being assessed.

GlobalFoundries also has a large-scale production facility in Dresden that may be clear of damage from the outage due to its two back-up energy centers independent of the public power grid. The factory employs 3,200 people and plans to become completely independent of the public power grid to buffer future occurrences that could disrupt production like this.

The semiconductor supply chain has seen an array of disruptions of various degrees, but a stray foil balloon causing an electrical blackout is a new one.

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