The chip shortage that had slowed automobile manufacturing has now spread to the production of smartphones and personal computers, threatening to derail a post-pandemic economic recovery.

The shortage spurred by strong chip demand during the pandemic has been exacerbated by the shutdown of a Samsung plant in Texas following a winter storm. The chip fabrication plant responsible for 5% of global supply has been idled since Feb. 16, causing widespread repercussions through the supply chain.

"There's a serious imbalance in supply and demand of chips in the IT sector globally," Koh Dong-Jin, the co-CEO who oversees Samsung's mobile division, said Wednesday at a shareholders' meeting.

The Samsung Texas plant manufactures telecommunications chips for the U.S. semiconductor giant Qualcomm. The facility also produces chips for organic light-emitting diode panels and for image sensors.

The supply crunch hitting Qualcomm will affect a wide range of smartphone makers that rely on the company for key components. Apple, which procures OLED panels from Samsung, could also face disruptions in iPhone production.

Samsung's Austin plant accounts for roughly 5% of the capacity at contract manufacturers that use 12-inch wafers, according to Taiwanese research firm TrendForce. The shutdown is expected to result in a 5% drop-off in global smartphone production during the second quarter.

Among 5G-compatible smartphones alone, global production is projected to shrink by 30%. Although Samsung is scrambling to restore operations at the plant, the group has issued no timetable for a restart.

The impact from the Texas freeze, which crippled the state's power grid, has extended to semiconductors beyond those that power smartphones. NXP Semiconductors, a Dutch outfit strong in auto chips, idled two Austin-area plants last month. Infineon Technologies, a Germany-based supplier of automotive chips, halted an Austin plant as well.

NXP has since restarted its two plants, but the shutdown caused approximately one month's loss of production, according to a statement from the company.

Tesla temporarily paused production at a California plant in late February due to the shortage in components. Honda Motor will suspend operations at five plants in the U.S. and Canada for a week starting next Monday in part because of the disrupted chip supply.

Only a handful of contract manufacturers handle chip production. Samsung and Taiwan Semiconductor Manufacturing Co. alone accounted for 72% of contract production in the fourth quarter of 2020. Stoppage at a single plant owned by this contingent will have a widespread ripple effect.

If communication and OLED semiconductors used in smartphones are in short supply, "clients will cope by boosting production of smartphones that use different telecom chips or liquid crystal displays," an executive at a semiconductor manufacturer said.

That leads to a further crush of orders for contractors like TSMC. The fallout has already descended upon the PC industry.

"Supply cannot keep up with demand," Jason Chen, chairman and CEO of Taiwanese computer maker Acer, said on March 3. "Our staff is scrambling to secure parts. This is unprecedented in the personal computer industry."

Acer is only able to fulfill 30% of its clients' orders, underscoring the severity of the business environment.

Asus, another Taiwanese PC maker, has said that supplies of PC semiconductors and LCD panels is 30% short of demand. The company foresees shipments dropping sharply in the first quarter.

Taiwanese players account for over 80% of global PC production, a position that could deepen the impact on the international market.

The demand for PCs was brisk last year as people switched to telecommuting and distance learning. "The production plans at the big-name PC makers will exceed those for 2020," said an executive at a global semiconductor manufacturer.

In China, rival smartphone producers such as Xiaomi and Oppo have aggressively procured parts as Huawei Technologies struggled with U.S. sanctions. Since they all use similar semiconductors, they are all fighting over a dwindling supply.

LCD panels could also be in short supply. "We won't be able to make products if we don't accept price increases in semiconductors, but it's uncertain to what extent we'll be able to shift costs onto higher product prices," said a manager at Japan Display, also known as JDI.

There is an insufficient supply of semiconductors that make displays functional. "Procurement could reach a crisis point in April," the JDI manager added.

The production of semiconductors requires complex etching of circuits on silicon wafers. The process normally takes about two to three months from the start of production to shipment, meaning a rapid response to orders is unfeasible.

Several observers predict the chip shortage will persist over the long term. General Motors projected in February that its profit will decline by as much as $2 billion this year as a result of production cuts.