At least 30 Taiwanese companies, mostly making parts for electronics, said on Wednesday that the Chinese government’s Covid control moves had led them to suspend production, as disruption from the measures spreads.
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.
“Overall, we believe China’s Covid policy is in transition as the government needs to adjust policies to respond to the Omicron variant, which is characterised by many asymptomatic cases but is highly infectious,” Barclays analyst Jian Chang said.
Global companies, from mobile phone to chip makers, are highly dependent on China and Southeast Asia for production and have been diversifying their supply chains after the pandemic caused havoc.
The Taiwanese companies making announcements to the stock exchange included Asia Electronic Materials, which makes parts for laptops, mobile phones and digital cameras.
It said its plant in Kunshan would be closed until next Tuesday, noting that it was “hard to estimate” the financial impact.
EFUN Technology, which makes parts for liquid crystal displays, said its plant in nearby Suzhou would also be closed until Tuesday, and would resume operations when the government gives the go-ahead, but it did not foresee a financial impact for the time being.
Chip substrate and printed circuit board maker Unimicron Technology, which also supplies Apple and Intel, said late on Tuesday its Kunshan operations closure would also extend to next Tuesday.
Taiwan’s Pegatron, which assembles iPhones for Apple, said on Tuesday it had suspended operations at its Shanghai and Kunshan plants due to the government’s strict protocols.
Some companies said they had applied to continue operations under a “closed loop” system, with workers isolated inside, including the Kunshan automotive electronics operations of Wieson Technologies.
- Reuters, with additional editing by George Russell
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