Russian-Ukrainian war impacts auto electronics

The Russian-Ukrainian war has severely impacted a number of sectors, including the electronics industry. The world's largest automotive wiring harness manufacturer based in Germany, LEONI, has shut down its factories in Ukraine and Russia due to the war, causing a large shortage of automotive wiring harnesses. After the suspension, Taiwan-funded companies such as Bizlink-KY and Guangyu are expected to benefit from a considerable transfer order effect.

Hon Hai Chairman Young Liu has confirmed that a portion of their customers has suspended shipments due to the war, and the supply of automotive wiring harnesses has been affected by the war. Hon Hai is closely monitoring the development of related events.

Before the escalated situation, the market was primarily focused on how the war would impact metals, oil, and maritime shipping, even though Ukraine is a major exporter of rare gases such as neon, krypton, and xenon, which are necessary for semiconductor production. However, due to semiconductor factories' inventory diversification, the overall impact of the war was not significant on the industry.

LEONI's factories in Ukraine and Russia were shut down due to the war, and the wiring harness became the first key component in the electronics industry to be affected by the war, and extended to end applications such as automobile manufacturing.

According to industry analysis, LEONI has more than 86,000 employees in 31 countries around the world, and most of the automotive wiring harnesses of German automakers are supplied by LEONI. In addition, LEONI has two factories in southwestern Ukraine, employing about 7,000 people, and two factories in Russia supplying German car factories, further concerns of supply disruption as production shutdowns are carried out.

International media has reported that Volkswagen Group, the largest car manufacturer in Europe, is facing exhaustion of its inventory of automotive wiring harnesses. It has been announced that the two factories in Zwickau and Dresden in Saxony will temporarily suspend the lines for a few days, and more factories may be shut down in the future. Brands such as Mercedes, BMW, Audi, and Porsche were also affected. A BMW spokesperson told the media that due to the lack of materials, its largest car production plant in Europe in Dingolfing may be completely shut down in the next week.

Bizlink is a Tesla wiring harness supplier. It was officially incorporated into the LEONI Industrial Application Business Group (INBG) in January this year, becoming an important growth driver. BizLink pointed out that the war has caused LEONI's factories in Russia and Ukraine to shut down, and the wiring harness for vehicles is in great shortage. If the war continues, it must be purchased from abroad or produced in factories in other places of LEONI.

Bizlink emphasized that if the war between Russia and Ukraine continues, LEONI will purchase overseas, and Bizlink will have the opportunity to supply products.