Fire at Chip Plant Impacts Car Audio

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AKM

It remains unclear if a fire at a factory that makes semiconductors, including digital to audio converter (DAC) chips that are used by at least four car audio suppliers, will cause disruptions in car or marine audio supply.

On October 30, a fire broke out at the AKM factory in Nobeoka City, Japan and burned for three days.  The plant produces DACs used in home and professional audio products, as well as car audio products. A report in Pro Sound News says the factory may be offline for six months or longer.

But a subsequent report in SemiMedia said AKM said it will now outsource semiconductor production through other facilities.

Some car audio industry members, as of this week, were left unsure if the fire will cause a delay in production of car or marine radios that use chips.  Some companies are scrambling to buy up any chips on the market through distributors or brokers. As a result, AKM IC chips were selling for 10 times the typical cost on the grey market, said one industry member, echoing several published reports.

Of the four car audio makers who said privately that they use AKM chips, two said they had good supply and did not expect any product delays. The two others said that they were still unsure of how the AKM fire will affect their production.

On top of the tariffs, COVID-19, and product shortages of the last couple of years, a chip shortage may be yet another challenge for some head unit makers.

 

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