More Taiwan firms suspend production in China as Covid-19 spreads

More than 30 Taiwan 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.

Among the Taiwan firms notifying the stock exchange was Quanta Computer Inc, an assembler of Apple Inc's MacBook, which said a Shanghai unit had suspended operations, with resumption depending on government approval.

It said it was in close touch with suppliers and assessing the financial impact.

Asia Electronic Material Co Ltd, which makes parts for laptops, mobile phones and digital cameras, 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, resuming operations on the government's go-ahead, but did not foresee a financial impact for the time being.

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

It said it was “integrating” its resources and manufacturing to cut the impact on customers, adding that its two Kunshan units accounted for about 13% of consolidated revenue in the year's first quarter.

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 on Tuesday it had suspended operations at its Shanghai and Kunshan plants because of the tough measures.

Reuters