China lockdowns affect chip, smartphone suppliers

The manufacturing hub of Shenzhen, China – home to Apple supplier Foxconn and other major tech manufacturers – faced a partial lockdown this week after a spike in COVID-19 cases.

Taiwan-based Foxconn, the world’s largest electronics manufacturer and a top supplier to Apple, Samsung, Google, and Amazon was forced to shut two of its Shenzhen factories after 60 new infections were reported Sunday. In keeping with China’s strict COVID-19 protocols, businesses providing non-essential services were ordered to shut down and more than 17 million will be tested for the virus, according to news service Nikkei Asia.

The Shenzhen government Sunday night said public transportation and all nonessential businesses will be ordered to shut down from Monday until March 20. Foxconn said in a statement that it would move some of its manufacturing to facilities in other cities. Shenzhen is Foxconn’s second largest manufacturing hub. It also has the world’s biggest iPhone production center in Zhengzhou, which so far is unaffected.

Foxconn is also behind Dynabook, formerly Toshiba Client Solutions Co. It’s unclear if Dynabook laptops will be affected. CRN reached out for comment and will update.

Taiwan’s biggest printed circuit board maker, Unimicron, which supplies Apple, Intel, and Nvidia, said its subsidiary in Shenzhen would stop production on Monday as well.

In Shanghai, China’s most populous city and home to chipmaker SMIC is also enacting new lockdown measures.

With some of the world’s strictest measures against COVID-19, China has so far reported fewer deaths than other developed nations, with 4,636 deaths reported since the beginning of the pandemic. Though, that number is highly contested.

The severe lockdowns in major manufacturing in China had a ripple effect on supply chain disruptions in the last two years.

CRN has reached out to Samsung and Apple for comment. A spokesperson for Intel declined to comment.

The news couldn’t come at a worse time for supply chain woes. Russia’s invasion of Ukraine has stirred new worries of material shortages and transportation route blockages. Ukraine is a top supplier of neon gas used in silicon chip production. The U.S.’s severe sanctions against Russia could also impact available of palladium, another crucial chipmaking component. CRN