China Just Shut Down Manufacturing in Shenzhen for a Week
If the chip shortages weren't bad enough already, they look likely to get worse following a spike in COVID-19 cases across Shenzhen and Shanghai.
As Nikkei reports, the Chinese government has ordered all nonessential businesses to suspend operations from today until March 20 as part of a lockdown. Shenzhen is home to Huawei, Oppo, and TCL, and counts as Foxconn's second-largest manufacturing hub in China. They must all now put down tools for the next six days at least. That's bad news for some of the biggest tech companies in the world including Apple, Amazon, Intel, Nvidia, and Samsung.
Other manufacturers affected by the lockdown include General Interface Solution (GIS) Holding (which produces touch panels for Apple and Samsung), and Unimicron (printed circuit boards for Apple, Intel, and Nvidia). GEM Services, which handles power management chip packaging and testing, must also shut down; countless other small manufacturers are likely impacted by this action, too.
Ultimately, shutting manufacturing for a week will have an impact on the supply chain, but on the flip side, such a quick and severe response should allow it to resume more quickly than would otherwise be possible. Meanwhile, local residents are being told not to travel and local bus services are being stopped. However, markets, pharmacies, and medical institutions can continue to operate while restaurants are limited to deliveries only.
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