The number of COVID-19 cases in Malaysia is surging, potentially exacerbating shortages of semiconductors and other components that have plagued carmakers for months.

Historically, the Southeast Asian country has not been as important to the technology supply chain as South Korea or Japan. But in recent years, Malaysia has emerged as an important center for chip testing and packaging, with Infineon, NXP and STMicroelectronics all setting up factories in the country.

At present, the epidemic in the country is heating up sharply, endangering plans to lift the blockade and resume full capacity production. The seven-day average of new cases per day has exceeded 20, 000, compared with just over 5000 at the end of June.

According to informal guidelines, if more than three workers are infected with the virus, the factory must be completely closed for two weeks for sanitary disinfection. The Delta strain is so contagious that it is difficult to stop.

"this could damage production in Infineon and other factories with thousands of employees," said Samuel Tan, an analyst at Kenanga Investment Bank Bhd Semiconductor.

Local companies are announcing such closures through the exchange. Italian Semiconductor and Infineon have had to close their factories.