A new outbreak of the coronavirus in China is halting production at the world’s largest electronics factories. The 17.5 million inhabitants of Shenzhen, cradle of the Chinese hardware industry, have to stay indoors and have themselves tested several times. This has consequences for Foxconn, the company that assembles iPhones for Apple in the South Chinese city.
Foxconn has more than one million employees worldwide, of which about 350,000 are based in Shenzhen. Personnel living and staying on the Foxconn campus may be able to continue working, Reuters news agency reported citing anonymous sources.
The lockdown also affects the large numbers of suppliers around Foxconn, causing the supply of parts to come to a standstill. That in turn affects companies in the entire province of Guangdong, where Shenzhen is located.
Foxconn tries to move production to one of the other factories. Foxconn has twelve factories in nine Chinese cities. The company – which originates from Taiwan – has been scaling down the Chinese share of its production for some time, in order to reduce the risk of disruptions.
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Shenzhen has been locked for at least a week. Huawei, one of the largest electronics manufacturers in Shenzhen with Foxconn, also had to shut down factories. This did not cause any problems in previous lockdowns, the company said. Tech companies such as Oppo and Tencent also have their headquarters in Shenzhen. Tencent mainly makes software, and is the creator of the popular app WeChat.
The Chinese government is opting for harsh lockdowns and strict quarantines to contain the corona virus. With the highly contagious Omikron variant that is now around, that is much more difficult. A large part of the Chinese population is still susceptible to corona, including many frail elderly. The Chinese health care system cannot cope with a huge increase in hospital admissions.
In Hong Kong, just over the border at Shenzhen, a corona wave is raging that has overloaded hospitals. Last 24 hours, Hong Kong had 26,000 infections and nearly 264 deaths from Covid-19.
More Chinese cities have been shut down to prevent corona outbreaks, including Shanghai and parts of Beijing. A lockdown was also implemented in the entire Jilin province in northeastern China on Monday. The provincial capital of Changchun (9 million inhabitants) was previously closed. Automakers Volkswagen and Toyota have to temporarily stop production at factories around Changchun.
A version of this article also appeared in NRC on the morning of March 15, 2022
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