HIGHLIGHTS
- Foxconn, Toyota, Volkswagen and other companies suspend operations in Shenzhen as the Chinese government shuts down its tech hub.
- China is facing with the largest Covid-19 outbreak in two years, Shenzhen is carrying out mass PCR testing for every 17 million residents.
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The blockade order becomes a burden for technology companies
Shenzhen, known as China’s Silicon Valley, is carrying out mass PCR testing for every 17 million residents after dozens of new local cases were recorded. The Shenzhen government on Sunday night said public transportation in the city will be halted and all nonessential businesses ordered to suspend operations from Monday through March 20.
Along with Shenzhen, Multiple Chinese provinces and cities have tightened restrictions in line with Beijing’s zero-tolerance goal of suppressing contagion as quickly as possible.
Foxconn, one of Apple’s largest suppliers, suspends operations in Shenzhen as the Chinese government shuts down its tech hub and several other areas to contain the country’s most severe Covid-19 release yet.
Unimicron, Taiwan’s largest printed circuit board manufacturer and a key supplier to Apple, Intel, and Nvidia, said Monday that its Shenzhen subsidiary will cease operations on Monday. According to the corporation, the subsidiary accounted for less than 3% of total sales.
Many large manufacturers are in trouble
In addition to Shenzhen, Shanghai regulators have to close schools in nearly 19 provinces across the country dealing with the drive release.
GEM Services, a Taiwanese power-management chip packaging and testing company, said in a stock market filing that its Shanghai plant is suspending production from Sunday to Tuesday in compliance with the local government’s request to take Covid prevention measures.
Other cities have enacted restrictions to varying extents. Officials have locked down Changchun city, the capital of northeastern Jilin province, shut schools in the financial hub of Shanghai and suspended public transport in the manufacturing centre of Dongguan.
According to the spokesman of Toyota, the company’s joint venture with China’s FAW Group had suspended production in Changchun, while its Tianjin city operations remained unaffected.
From Monday to Wednesday, Volkswagen, which also has a joint venture with FAW, said it will halt production at its vehicle and component operations.
Tran Van Hieu
Shenzhen lockdowns and the anticipated shock for the international supply chain
