Chip supplies to take new hit as COVID-19 surges in Malaysia

The number of COVID-19 infections in Malaysia is surging, threatening to aggravate shortages of semiconductors and other components that have hammered automakers for months.

The Southeast Asian country hasn’t historically had the kind of importance to technology supply chains that Taiwan, South Korea or Japan do. But in recent years, Malaysia has emerged as a major center for chip testing and packaging, with Infineon Technologies AG, NXP Semiconductors NV and STMicroelectronics NV among the key suppliers operating plants there.

Now numbers of COVID-19 infections are soaring in the country, jeopardizing plans to lift lockdowns and restore full production capacity. The seven-day average for reported daily infections has pushed past 20,000, up from just over 5,000 in late June.