Government efforts to curb energy consumption and reduce carbon emissions, along with surging coal prices, are leading to power outages across many of China’s manufacturing hubs, threatening to further disrupt strained global supply chains for semiconductors and other vital goods.
Over the past week, local officials have forced factories in China’s Guangdong and Jiangsu provinces to curtail operation hours or shut down temporarily as officials try to rein in energy use, according to company filings and interviews with company officials by The Wall Street Journal.
In other areas, factories are cutting production because coal has become too expensive, a problem exacerbated by a Chinese ban on imports of the commodity from Australia since last year after a diplomatic brawl over Canberra’s call for an independent global inquiry into the origins of Covid-19.
In one of the most affected areas, Kunshan, a city in China’s eastern Jiangsu province near Shanghai, more than 10 Taiwan-based semiconductor-related companies filed announcements with the Taiwan Stock Exchange this week saying they are temporarily closing local facilities until the end of September.Several Apple suppliers are affected, such as mechanical-parts maker Eson Precision Engineering Co. and Unimicron Technology Corp. , a printed-circuit-board maker.