Apple, Tesla Suppliers in China Halt Production to Reduce Power Usage

Several Apple and Tesla suppliers have suspended production at some Chinese factories for a number of days to comply with tighter energy consumption policies, putting supply chains at risk in the peak season for electronics goods.

Two major Taiwanese chipmakers, however, said their China facilities are operating as normal.

The development comes as tight coal supplies in China and toughening emissions standards have triggered a contraction in heavy industry in several regions, dragging on the country’s economic growth rate, analysts have said.

Apple supplier Unimicron Technology late on Sunday said three of its China subsidiaries stopped production from midday on September 26 until midnight on September 30 to “comply with the local governments’ electricity limiting policy”.

The Taiwanese maker of printed circuit boards said it did not expect significant impact as other plants would make up production.

Eson Precision, an affiliate of Taiwan’s Hon Hai Precision Industry (Foxconn), in a statement said it suspended production from Sunday until Friday at facilities in the Chinese city of Kunshan.

Concraft Holding, a supplier of speaker components for Apple’s iPhone and which owns manufacturing plants in Suzhou city, said it would suspend production for five days until noon on Thursday and use inventory to meet demand.

Chipmakers United Microelectronics Corp (UMC) and Taiwan Semiconductor Manufacturing Co told Reuters there was no impact at their China plants.

“UMC’s Hejian fab in Suzhou is currently running at full capacity utilization of 80,000 plus wafers per month,” said the Taiwanese firm, whose clients include Qualcomm Inc.

Two people familiar with the matter told Reuters that facilities in Kunshan of contract manufacturer Foxconn have seen a “very small” impact on production.

Foxconn had to “adjust” a small part of its capacity there, which includes the manufacture of non-Apple notebook computers, one of the people said, adding that the company has not seen any impact at other major production hubs across China.

The second person said the company had to move some of the Kunshan workers’ shifts in late September to early October.

Foxconn, a major Apple supplier, declined to comment.

© Thomson Reuters 2021