With its 17 million inhabitants, the large city of Shenzhen is often described as China’s Silicon Valley. To respect the country’s zero covid policythe city again closed its “non-essential services” due to a new wave of Covid-19. According to Reutersthe Foxconn factory, on which Apple largely depends, is affected by these closures.
Shenzhen factories shut down again
The megacity’s factory closures are likely to hit the production of several tech giants that rely on Shenzhen for their global output. Among the companies concerned, we find in particular Apple, Samsung, DJI or Oppo. Foxconn and Unmicron, two Chinese manufacturers, have announced the closure of their factories in Shenzhen, to comply with the new restrictions imposed after the appearance of an outbreak of Covid-19 in the city (60 new infections on Sunday).
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Since March 13, authorities have been asking residents to stay at home as much as possible. A mass testing system has been set up in Shenzhen to stem the spread of the virus. The consequences are dramatic for manufacturers who are forced to close their factories. Foxconn and Unmicron are therefore suspending their activities until further notice. Even if the delay should be quite brief, it is a new ambush on the already largely dented path of consumer electronics.
A worrying confinement
According to South China Morning PostFoxconn employs 200,000 workers in the megalopolis of Shenzhen, living and working in two huge campuses, in the districts of Guanlan and Longhua. Part of the production will be transferred to other factories, but this will not be enough to make up for the delay. With this new confinement, concern is already being felt in the rest of the world. According to Thierry Breton, European Commissioner for the Internal Market “if it lasts, this new confinement in China will have economic repercussions”.
The two years of pandemic that we have gone through and the war in Ukraine that is currently taking place have contributed to causing the semiconductor pandemic that we are experiencing today. The war led by Russia could accentuate this phenomenon. Ukraine produces neon, a noble gas that allows the manufacture of semiconductors. At the beginning of 2022, Ukraine was still supplying 70% of all neon worldwide… Epidemic rebounds plunge the industry each time in deep chaos.