News & Events

Production suspended in Shenzhen amid COVID lockdown

The government of Shenzhen, China has imposed a COVID lockdown of the city for a week until March 20, with manufacturers there forced to suspend production.

Taiwan-based touch panel maker GIS will suspend the operation at its factories in Shenzhen for a week in the wake of the lckdown, which was announced on the evening of March 13. GIS's Shenzhen production accounts for about 30% of the company's overall capacity and the company is planning to adopt more flexible working schedules at its plants in Chengdu and Wuxi - both in China - to fill the gap.

GIS expects the impact to be limited but will continue to monitor clients' sales and order pull-ins for the long term.

Foxconn's plants in Shenzhen will also be locked down and will wait for the local government's notification when production can resume. Since Foxconn has already prepared several backup plants, the company has begun shifting orders to the backup plants to minimize the impact of the lockdown.

Foxconn has also begun conducting COVID-19 tests for all its workers at local factories.

Taiwanese PCB makers Avary (a subsidiary of Zhen Ding), Unimicron Shenzhen, and Global Brands Manufacture's subsidiary in Shenzhen also suspended production at their factories.

Avary's announcement noted that the company's other plants will provide support to help satisfy clients' demand, while Unimicron expects the lockdown to only have a limited impact on its operation as the subsidiary only contributes less than 3% of its overall revenues. Global Brands Manufacture also believes the lockdown at its subsidiary's plants to only have a minor impact.

Shenzhen Taiflex Electronics, a subsidiary of FCCL maker Taiflex Scientific, will follow the Shenzhen government's orders, but the decision will not have a major impact on the company's operation since Shenzhen Taiflex is mainly responsible for the trading business instead of manufacturing.

Inductor maker King Core will also lock down its Shenzhen plants and wait for further notifications from the local government.

Innolux's office in Shenzhen will work from home for a week with all employees to also receive COVID tests. Since Innolux does not have production lines in Shenzhen and Dongguan, it will not have much of an impact.

In Shanghai, PCB drill maker Topoint noted that the company will perform a 48-hour COVID-19 test, following the local government's request. The test will end at 8 am on March 15.

Cooling module maker Asia Vital Components (AVC) announced that its two manufacturing subsidiaries in Shenzhen suspended operation on March 14 and will wait for the local government's notifications before resuming operation.

AVC also pointed out that its inventory at overseas warehouses should be sufficient to satisfy clients' short-term demand and the company is now arranging its other factories to help cover the missing capacity. If the lockdown is lifted within a week, the company will not experience any major impact on its operation.

Cooling fan maker Yen Sun Technology also locked down its factories in Dongguan because of the government's policies. The move so far has not created a major impact to Yen Sun's business. Since Yen Sun still has molds at its other plants, the company will have no trouble continue supplying products to clients.

Consumer electronics vendor Airmate has implemented a lockdown at its plants in Shenzhen from March 14-20, but the resumption of its production will still depend on the local government's notification.

Since assembly and component manufacturing for notebooks are all conducted in either eastern China or Chongqing, notebook ODMs and component makers so far have not experienced any impact from Shenzhen's lockdown. Since components made in Shenzhen are mostly those for which ODMs have already built excess inventory, the supply is unlikely to face any major issue any time soon.

However, since Shenzhen is a major port for notebook shipments, it could cause problems to the current global logistics system that is already experiencing serious delays.

AU Optronics' (AUO) employees in the Shenzhen office have already begun working from home. The company will closely monitor the status of the pandemic and make adjustments to its working policies. So far, the company's operation is not being affected.

Surface-treatment services provider Superior Plating Technology, a partner of Apple, will not see its production for hard disc drive (HDD) products undermined by the lockdown as the related production lines are all located in Thailand. However, the company will push to fulfill its clients' orders in terms of production for consumer electronics and true wireless stereo (TWS) earbuds after the lockdown is being lifted.