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Apple suppliers halt production as China restricts energy use

Apple suppliers halt production as China restricts energy use

Categories: Technology
Posted: September 27, 2021

A crackdown on energy usage in China has seen a number of key Apple suppliers halt production, according to a new report today.

One supplier to both Apple and Tesla said that it had been forced to suspend production from Sunday until this coming Friday, while another said it would need to cease production in two cities until the end of the month …

Nikkei Asia reports.

Eson Precision Engineering, an affiliate of Foxconn — the world’s biggest iPhone assembler — and a key mechanical parts supplier for Apple and Tesla, on Sunday said it suspended its production from Sunday until Friday at its facilities in the Chinese city of Kunshan in direct response to the city’s policy of stopping electricity supply for industrial use.

“The company will leverage its inventory to maintain the operation while production is halted,” Eson said in a filing with the Taiwan stock exchange. “We expect to arrange production on the weekends or in the upcoming holidays [next month] to meet customers’ needs” […]

Unimicron Technology, a major print circuit-board maker and key Apple supplier, said its subsidiaries in the Chinese cities of Suzhou and Kunshan in Jiangsu Province also needed to stop production from Sunday noon till the end of the month. The Taiwanese company said it would mobilize production capacity in its other manufacturing sites to mitigate the impact, according to its stock-exchange filing on Sunday.

IPhone speaker component supplier Concraft Holding, which owns manufacturing facilities in the Chinese city of Suzhou, said in a stock- exchange filing that it would suspend production for five days until noon Thursday and utilize its inventory to support the demand.

The Chinese government is responding to dramatically increasing costs for coal and natural gas, both of which are used extensively in the country for electricity generation. Beijing is also reportedly unhappy about the failure of regional governments to hit targets for reducing emissions. Additionally, it’s not uncommon for China to order local shutdowns when air pollution levels increase, especially during events that attract foreign visitors.

City and regional governments have said that domestic energy usage is being prioritized over industrial use.

The move comes at a bad time for Apple, which is already struggling to keep up with demand for the iPhone 13, and where component shortages are also causing production delays. A Kuo report said that some components used in Macs are back-ordered by up to a year.

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