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China’s COVID curbs hit Toyota, Volkswagen and Apple supplier Foxconn

China's COVID curbs hit Toyota, Volkswagen and Apple supplier Foxconn

Some Apple suppliers, from Foxconn to Toyota and Volkswagen, have been compelled to cease operations as part of China’s attempts to contain its greatest COVID-19 outbreak in two years, raising fears about supply chain disruptions.

In accordance with Beijing’s zero-tolerance goal of suppressing contagion as quickly as possible, multiple Chinese provinces and cities have tightened restrictions, including the southern Chinese tech hub of Shenzhen.

Following the discovery of hundreds of new cases in Shenzhen, China’s Silicon Valley, the city is doing widespread testing. Public transportation has been stopped, and officials have asked individuals to work from home as much as possible this week.

As of the beginning of this year, China has reported more local symptomatic COVID-19 cases than it did for the whole year of 2021.

HTPIC (formerly known as Foxconn Technology Group) said that its Shenzhen operations will be paused until further notice and that it would deploy backup facilities to minimize the impact of the shutdown.

According to two people acquainted with the situation, Foxconn and its subsidiaries’ activities in Shenzhen would be halted for the first part of this week at the company’s headquarters.

It was claimed by one of those there that the government was enabling corporations to continue provided they could establish a “closed management” system in which staff would live and work in isolation. During the 2008 Winter Olympics in Beijing, a similar system was in effect.

In addition to Unimicron Technology Corp, which supplies Apple and Intel with chip substrates and printed circuit boards, and Sunflex Technology Co Ltd, which manufactures flexible printed circuit boards, other Taiwanese companies have announced that their Shenzhen operations have been suspended as well.

Sunflex said that the facility will be closed till Sunday.

Requests for comment from the media were not immediately returned by Apple. Intel did not respond to a request for comment.

Managing director of manufacturing consultant Victure Industrial Co., Limited in Shenzhen Paul Weedman warned that the limitations were having a rippling effect across the whole Guangdong region and beyond. Production for some of his clients’ orders has been halted, and numerous plant inspections have been postponed, according to the manufacturer.

“Imagine that you have a factory with 100 employees and that you are suddenly unable to accomplish anything – you are unable to fulfill current orders and you are unable to take new ones. The consequences are not felt for 2 or 3 weeks, but for 3-6 months.”

In a statement posted on WeChat, the Yantian International Container Terminal (YICT), one of China’s busiest ports, stated it was working properly, albeit two enterprises with warehouses at the port reported they had to temporarily cease operations.


Other cities have adopted limitations of varying degrees of severity as well. Schools in Shanghai’s financial district have been closed, while public transportation in Dongguan’s industrial center has been halted. Changchun, the capital of northeastern Jilin province, has been closed down.

In a statement released on Monday, Toyota claimed that its joint venture with China’s FAW Group had ceased manufacturing in Changchun, but that its operations in Tianjin had not been impacted.

From Monday to Wednesday, Volkswagen, which also has a joint venture with FAW, said it had halted production at its car and component operations throughout the country. Despite repeated requests for comment, the FAW, which has its headquarters in Changchun, did not answer.

A factory owner in Dongguan, who identified himself only as Lau, said that his company was compelled to close its doors from Sunday to Tuesday. They were also having difficulties procuring components from vendors as a result of the viral limitations, he said.

“The only thing we can hope for is that they will allow us to continue with the manufacturing as soon as possible,” he added. With the exception of China, the rest of the world has moved on. The zero-COVID plan should be abandoned entirely, according to them.”

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