Chinese suppliers Apple, Tesla, Intel, Qualcomm and Nvidia are forced to suspend production for several days. Deprived of electricity by order of Beijing, many factories are currently shut down.
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China has temporarily cut off power to several production centers. In recent months, 17 regions in China imposed power cuts to their industries. These measures aim to limit the increase in energy prices and contain the emission of greenhouse gases. Chinese President Xi Jinping has indeed pledged to achieve carbon neutrality by 2060 when China is still very dependent on coal power plants.
The Chinese government imposes regular power cuts to three regions specific: Jiangsu, Zhejiang and Guangdong. These areas are home to many factories intended to produce components for multinationals. Currently, these factories are operating at full speed to meet the gargantuan demand of the electronics market, which is in full recovery after the health crisis. In fact, their electricity needs have skyrocketed.
Chinese production lines are at a standstill
Under these conditions, many suppliers from firms such as Apple, Nvidia, Qualcomm, Tesla and Intel find themselves regularly shut down. This is particularly the case of Unimicron Technology. The manufacturer claims that several of its factories will have to close their doors for several days following power cuts imposed by Beijing. The Taiwanese firm is one of Apple’s main suppliers.
This is also the case with Eson Precision Engineering, a subsidiary of Foxconn and one of the suppliers of Apple and Tesla, and of Concraft Holding, which supplies the speakers for iPhone 13. However, some factories, such as Foxconn et Pegatron, are currently exempt from the restrictions. Good news: the TSMC founder is, for the time being, not affected by the cuts.
These power cuts are in addition to the shortage of computer chips that hits the entire electronics industry. Rising demand, production difficulties and sanitary measures are already crippling the production lines of many companies. While some big names in the industry prophesy the end of the chip shortage by early 2022, others ‘expect several years of waiting. Nvidia, Intel and TSMC expect to be without chips until 2023.
Source : Nikkei
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