New Shenzhen lockdown threatens to further complicate global electronics supply
The COVID-19 pandemic continues to derail lives around the globe, even ascompanies increasingly push for a return to something resembling normal. The fallout hasn’t just had a human toll, but has alsoimpacted the availability of plenty of products, including smartphones. China is currently suffering from its worst outbreak since early 2020, and because of the country’s zero-tolerance COVID policy, it’s forcing a lot of cities into strict lockdowns, including techonlogy-hub Shenzhen — and that could serve to seriously aggravate the already-very-delicate chip shortage situation.
The lockdown was announced Sunday night (viaThe New York Times) and will go on for at least 7 days. All non-essential workers are ordered to stay home, all adults in the city must undergo three PCR tests in the coming days, and all public transportation in the city is coming to a halt.
That’s problematic because as part of the measure, assembly lines for electronics companies in the city are being forced to stop. Foxconn, which assembles smartphones for a handful of OEMs — maybe most notably Apple — has announced (viaReuters) that it’s suspending production in Shenzhen (its second-largest plant) because of the lockdown.
Other companies joining the measure are Unimicron (also serving as a supplier for Apple and Intel) and Sunflex (a maker of flexible PCBs). Shenzhen’s also home to one of the world’s busiest ports, and a disruption in operations there could affect global shipping prices.
If all goes well (knock on wood), assembly lines could be restarted next week as the lockdown ends. But if it’s extended too long, there’s the possibility for increasingly catastrophic effects on the global smartphone supply, which has already been weakened as a result of the ongoing semiconductor shortage.
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