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Apple suppliers Foxconn, Unimicron cut output amid China’s COVID curbs

By Sarah Wu and Yimou Lee

TAIPEI (Reuters) -Apple suppliers Foxconn and Unimicron Technology Corp said on Monday they have suspended operations in the Chinese city of Shenzhen, after the tech hub imposed strict measures to stem a COVID-19 outbreak.

Shenzhen, known as China’s Silicon Valley, is carrying out mass testing after dozens of new local cases were recorded in the southern city. Officials have suspended public transport and urged people to work at home this week as much as possible.

Foxconn, formally known as Hon Hai Precision Industry Co Ltd, said its Shenzen operations would be suspended until further notice, adding it would deploy backup plants to reduce the disruption to production.

Two sources familiar with the matter told Reuters that Foxconn and its subsidiaries’ operations in Shenzhen would be suspended for the first half of the week.

One of the people said the government was allowing companies to operate if they could create a “closed management” system where employees would live and work in a bubble, cut off from the wider public. Such a system was in place during the Beijing Winter Olympics.

Chip substrate and printed circuit board maker Unimicron Technology also supplies to Intel (NASDAQ:INTC), and flexible printed circuit board maker Sunflex Technology Co Ltd. Sunflex said its plant would be closed until Sunday.

Apple (NASDAQ:AAPL) and Intel did not immediately respond to requests for comment.

China is battling its biggest COVID-19 outbreak since the start of the pandemic. Multiple provinces and cities have tightened restrictions in line with Beijing’s “dynamic-clearance” ambition to suppress contagion as quickly as possible.

Officials have locked down Changchun city, the capital of northeastern Jilin province, and shut schools in the financial hub of Shanghai.

Toyota said on Monday its joint venture with China’s FAW Group had suspended production in Changchun, while its Tianjin city operations remained unaffected.

FAW, which is headquartered in Changchun, also has a joint venture with Volkswagen (DE:VOWG_p). Both companies did not immediately respond to a request for comment.

Other companies that have reported an impact to their operations by China’s COVID-19 measures include electronic component manufacturer Sanyou Corp and Qingdao Guilin Environmental Technology.

Source : Reuters

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