Taiwan Electronics Parts Makers Suspend Production in China as COVID-19 Spreads

Around 30 Taiwanese companies, many making electronics parts, said on Wednesday that government COVID-19 control measures in eastern China had led them to suspend production until at least next week, as disruption from the measures spreads.

China has put Shanghai under a tight lockdown since late March and neighbouring Kunshan has also tightened curbs to control the country's biggest COVID-19 outbreak since the coronavirus was discovered in late 2019 in the city of Wuhan.

Global companies, from mobile phone to chip makers, are highly dependent on China and Southeast Asia for production and have been diversifying their supply chains after the pandemic caused havoc.

The Taiwanese companies making announcements to the stock exchange included Asia Electronic Material Co Ltd, which makes parts for laptops, mobile phones and digital cameras.

It said its plant in Kunshan would be closed until next Tuesday, adding it was "hard to estimate" the financial impact.

EFUN Technology Co Ltd, which makes parts for liquid crystal displays, said its plant in nearby Suzhou would also be closed until Tuesday, and would resume operations when the government gave the go-ahead, though added it did not foresee a financial impact for the time being.

Chip substrate and printed circuit board maker Unimicron Technology Corp, which also supplies Apple Inc and Intel, said late on Tuesday its Kunshan operations closure would also extend to next Tuesday.

It said it was "integrating" its resources and manufacturing to lessen the impact on customers, adding its two Kunshan subsidiaries accounted for around 13 percent of consolidated revenue in the first quarter of this year.

However, some companies said they had applied to continue operations under a "closed loop" system, with workers isolated inside, including the Kunshan automotive electronics operations of Wieson Technologies Co Ltd.

Taiwan's Pegatron Corp, which assembles iPhones for Apple, said earlier on Tuesday it had suspended operations at its Shanghai and Kunshan plants due to the government's strict COVID-19 protocols.

© Thomson Reuters 2022