A man wearing a face mask walks along an empty road in front of the Twin Towers during the first day of Full Movement Control Order (MCO) in Kuala Lumpur, Malaysia. Photo: VCG

Chinese semiconductor industry insiders said on Tuesday that the domestic sector is prepared to cope with potential disruptions posed by the decision by Malaysia, a major chip producer, to impose an indefinite lockdown due to the COVID-19 epidemic.

With the number of COVID-19 cases continuing to rise, a nationwide lockdown in Malaysia, home to many semiconductor packaging and testing facilities, has been extended indefinitely after it was due to expire on Monday, prompting concerns over potential disruptions on the already constrained global chip supply chain.

However, insiders said that domestic chip firms have been preparing for such disruptions and there is no need for worry.

A sales director with a large chip company based in the island of Taiwan that has a factory in Malaysia told the Global Times on Tuesday that Malaysia's decision would only have a very limited impact on the company's operations because of a contingency plan put in place several months ago.

"We recently moved part of our production lines from Malaysia to the Chinese mainland, so our supply chain would not be disrupted," said the person, noting that transformation of the production lines actually began last year.

While Malaysia has a presence in the semiconductor sealing and testing market on a global scale, the Chinese mainland's sealing and testing industry is also very large, Hu Caiyan, an office director with the Institute of the Semiconductor Industry of Nanjing University of Posts and Telecommunications, told the Global Times on Tuesday.

In 2019, the Chinese mainland's semiconductor sealing and testing sector accounted for more than 20 percent of the global market. Malaysia accounts for 13 percent of the global sealing and testing market, and it is the world's seventh-largest semiconductor exporter, according to media reports.

"Also, by upgrading some old production lines in the Chinese mainland, the missing part of the supply chain could be replaced to meet industry demand," said Hu.