Sunday, October 17, 2021
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As ‘dark-age’ fears strike China over power crisis, global majors Tesla, Apple halt manufacturing operations

China is in the grip of a power crunch as a shortage of coal supplies, toughening emissions standards and strong demand from manufacturers have pushed coal prices to record highs

Amid widening ‘dark-age’ fears due to the electricity supply crunch in China, top global players including suppliers for Tesla and Apple have announced that their manufacturing operations in the Chinese mainland will remain suspended due to power constraints. According to the top company management, the disruptions might affect the industry chain and production of major electronic devices if the situation gets worse.

China is in the grip of a power crunch as a shortage of coal supplies, toughening emissions standards and strong demand from manufacturers and industry have pushed coal prices to record highs and triggered widespread curbs on usage. Rationing has been implemented during peak hours in many parts of northeastern China since last week, and residents of cities including Changchun said cuts were occurring sooner and lasting for longer, state media reported.

On Monday, State Grid Corp pledged to ensure basic power supply and avoid electricity cuts. The power crunch has hurt production in industries across several regions of China and is dragging on the country’s economic growth outlook.

The impact on homes and non-industrial users comes as night-time temperatures slip to near-freezing in China’s northernmost cities. The National Energy Administration (NEA) has told coal and natural gas firms to ensure sufficient energy supplies to keep homes warm during winter.

Meanwhile, Apple’s supplier Unimicron Technology Corp has said that its three manufacturing plants in Kunshan, East China’s Jiangsu Province, were suspended from 12 pm on Sunday until 12 am on Thursday, following power curbs announced by local authorities. The company said it will move the affected output to other plants in order to meet delivery dates. The company, however, believes that the 4.5-day suspension will not have a large impact on its overall production, said the announcement.

Electronic parts processor ESON Precision Engineering Co, which is based in Taiwan island, which provides components for US electric carmaker Tesla, and Concraft Holding Co, which provides acoustic parts for Apple, both announced on Sunday they would suspend their factories in Kunshan from Sunday to Thursday.

They also said that the five-day suspension would not harm their normal operation.

Pegatron Corp, one of Apple’s product suppliers that have factories in Kunshan and Suzhou city, said on Monday that it hadn’t received any notices to suspend production because of power curbs.

A spokesperson of Foxconn, the largest iPhone maker, on Monday said that its factories in the mainland have not been affected.

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