How are SG companies dealing with the chip shortage?

Companies have to wait for more than 20 weeks for chips to arrive, the highest since 2017.

Singaporean companies have developed several strategies to address the ongoing chip shortage, according to a Maybank Kim Eng report.

"According to Susquehanna, chip wait times are now more than 20 weeks, the highest it has been since the firm tracked this metric since 2017," the brokerage said in a report on Singapore technology.

Maybank Kim Eng found several strategies used by Singaporean firms to cope with these delays, which include:  i) advanced procurement of inventories, ii)  reaffirming suppliers’ delivery commitments, iii) redesigning circuitry and  using  alternative  components;  iv)  speeding  up vaccinations;  v)  leveraging  support from blue-chip customers, and in certain instances, and vi) leveraging  subsidiaries for capacity/ supply chain expertise.

It noted that AEM is facing supply challenges as a result of the high number of COVID-19 infections in Malaysia, and that it is mitigating this through additional work shifts and having a supply team that can manage the supply crunch.

UMS was hit by worker capacity restrictions, but does not face inventory shortages due in part to its recent acquisition of JEP. Like AEM, it has also implemented additional work shifts in Malaysia.

Venture is speeding up vaccination rates in its workers, aiming to have 80% of its Malaysia-based employees inoculated with at least one dose of the COVID-19 vaccine by the third quarter. It is also implementing additional work shifts. On the components shortage side, Maybank Kim Eng noted that Venture is applying different strategies such as using alternative components, going to stockists, or purchasing components in advance.

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