Sichuan Government, amidst the consecutive days of high temperature, announced that all businesses are to suspend production for six days until midnight on August 20th in order to ensure grid safety by placing priority on public power consumption. As the market worries that such implementation may affect Taiwanese suppliers, Foxconn responded that the company has not received any major impact, while Quanta and Wistron responded with “no impact”.
Sichuan did not exclude the white list this time, which means that Foxconn, Quanta, Compal, Pegatron, Wistron, and Inventec, who have established plants in Chengdu and Chongqing, are now under the pressure of suspended production. The market fears that the implementation would impact the production lines of these Taiwanese companies, and may eventually result in a standstill within the supply chain.
Foxconn’s Chengdu plant is primarily responsible for the assembly and production of Apple Watch and Macbook. The market evaluates that the implementation should not affect the production of iPhone 14 too much as it is now at the latter stage. Foxconn, in response to Sichuan’s power restriction, commented that the company has not been hit with a sizable impact.
Quanta produces 80% of notebooks at its Chongqing plant. The company commented that the power restriction has yet to induce any impact towards operation, and remains unchanged for its shipment target in August.
Compal’s Chongqing and Chengdu plants are responsible for 50% of its notebook assembly. The company commented that it is currently unclear of the corresponding impact from the power restriction, and is thus unable to comment on the development.
Wistron’s Chongqing and Chengdu plants serve as crucial locations for assembly. The company, after confirmation, commented that the power restriction has not affected its operation.
Inventec has 90% of capacity from its Sichuan plant area that is focused on assembly businesses. The company commented that the power restriction has yet to induce any impact thus far.
Corporations within the industry commented that the market is concerned pertaining to how Sichuan’s comprehensive power restriction that orders six days of production suspension would affect Taiwanese companies, though the industry is only under inventory regulation right now, and there should not be any sizable impact if the restriction is rotated among companies throughout the 6-day period.
(Cover photo source: Flickr/Chris CC BY 2.0)