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Taiwan Tech Firms in Kunshan Warn of Delays Amid Covid Curbs

Some Taiwanese firms making chip and electronic components in the eastern Chinese city of Kunshan said deliveries would be postponed until next month


The yuan-denominated bonds are offered by mostly European automobile firms and financial institutions to balance foreign exchange risks.
Panda bond offerings rose in 2021 on hopes of a post-pandemic economic recovery, brushing aside the risk posed by China's real estate market downturn. This image shows a gated community in Shanghai during the recent lockdown. File photo: Reuters.

 

Taiwan firms making chip and electronic components reported a mixed picture on Wednesday on work resumption in the eastern Chinese city of Kunshan after Covid-19 curbs, with some warning deliveries would be postponed until next month.

China has put Shanghai under a tight lockdown since late March and neighbouring Kunshan has also tightened curbs to control the country’s biggest Covid-19 outbreak since the coronavirus was discovered in late 2019 in the city of Wuhan.

That had caused dozens of Taiwanese firms, many making parts for the semiconductor and electronics industries, to suspend operations.

Global companies, from makers of mobile phones to chips, are highly dependent on China and Southeast Asia for production and have been diversifying their supply chains after the pandemic caused havoc.

Chip substrate and printed circuit board maker Unimicron Technology Corporation said its Kunshan plant was gradually resuming operations from Wednesday.

Unimicron, which supplies Apple and Intel, said in a statement to the Taipei stock exchange that the factory had suspended production from April 2 to 19.

It added it was “gradually resuming work depending on local personnel and logistics conditions”.

However, Asia Electronic Materials, which makes parts for laptops, mobile phones and digital cameras, said its plant in Kunshan would continue to be closed, having originally reported the suspension would last until Tuesday.

It added it had applied for government permission to be allowed to resume work and that it had been given permission to deliver goods and would do so from current stocks.

“It is estimated that some orders will be postponed until May,” the company added in its stock exchange statement.

Flexible printed circuit maker Complex Micro Interconnection said it too saw some deliveries not happening until next month, adding it would look at the “detailed rules” and apply to resume production.

Bike maker Giant Manufacturing said its Kunshan electric bike operations remained closed, adding its workers would put in overtime to catch up once it’s allowed to re-open.

Speaking to reporters in Taipei, Taiwan economy minister Wang Mei-hua said Taiwanese companies were slowly resuming production in China, but there were still logistics problems.

“Certainly on the impact for supply chains there is a lot of uncertainty,” she added.

Cheng Ping, CEO of Delta Electronics, a supplier of power components to companies such as Apple and Tesla, was quoted in Taiwan media on Wednesday as saying 20% of April production had been affected by the China lockdowns.

“At present the orders are all in hand, and customers are in a hurry, pressing us every day,” he was quoted as saying.

Still, the production resumption news cheered Unimicron’s shares, which rose more than 3% in morning trade, outperforming the broader index which was flat.

 

  • Reuters with additional editing by Sean OMeara

 

 

 

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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