China continues to apply its “zero Covid” policy. After new cases were discovered in Shenzhen, the city decided to shut down non-essential businesses and activities, including many electronics factories. The production chain could once again be largely disrupted, especially for Apple.
iPhone SE 5G // Source: Apple
China continues to enforce a strict Covid policy. Following an increase in Covid-19 cases (66 new cases) in Shenzhen, a city of 17 million souls, the government imposed a closure of industries and businesses supplying non-essential products. Strict confinement is also in place for the inhabitants, who will all be tested. Like the shortage of components, this will undoubtedly have repercussions on the tech market.
Shenzhen factories shut down: what impact?
It turns out that Shenzhen is one of the country’s major technology parks: the city notably hosts the headquarters of Chinese tech giants such as Tencent, Huawei, and ZTE. But the metropolis is also home to a plethora of factories, especially those of Foxconn. This Taiwanese manufacturer of electronic products is the supplier and assembler of big names, such as Apple and Samsung. The Shenzhen site is, among other things, known for its iPhone production.
The city of Shenzhen, China’s “Silicon Valley” // Source: Unsplash Darmau Lee
Foxconn has declared a halt to production at its Shenzhen factories from March 14 until further notice. The company also said it would relocate operations to its other production sites in China, to minimize the impact of the shutdown as much as possible. Containment is, for the moment, planned until March 20. The resumption of activities could possibly be authorized if Foxconn sets up a closed production circuit, that is to say a sort of health bubble for all employees.
What impacts?
Given the number of factories located in Shenzhen, and the importance of those of Foxconn, this could have an impact on the entire chain of production and distribution of electronic products. It is not yet known if this will precisely have an effect on the availability of the iPhone SE 5G, which is already available for pre-order. It would also seem that the new Mac Studio is produced in one of the two factories in Shenzhen, which could potentially affect the available stock and create an air pocket in the coming weeks or months. Everything will depend on the length of this interruption.
One thing is certain, the Covid pandemic continues to disrupt electronics production chains.
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