Some of Apple’s suppliers are currently closing production operations amid China’s energy crisis in which prices have risen and the government has begun curbing consumption. This comes just days after Apple put on sale the best iPhone ever and needs to keep the supply chain running as smoothly as possible.
According to a new report by Nikkei, one of Apple’s suppliers has stopped production and will not return to the network until the end of the week.
Eson Precision Engineering, a subsidiary of Foxconn – the world’s largest iPhone assembler – and a key supplier of mechanical parts for Apple and Tesla, said on Sunday it had suspended production Sunday to Friday at its plants in Kunshan, China, in direct response to city supply policy electricity for industrial use.
Another supplier, Unimicron Technology, suspended production in two cities by the end of the month. It plans to increase capacity at other plants to try to compensate for the drop in production.
Unimicron Technology, a major printing board manufacturer and a key supplier to Apple, said its subsidiaries in the Chinese cities of Suzhou and Kunshan in Jiangsu Province must also suspend production from Sunday at noon to the end of the month. The Taiwanese company said it would mobilize production capacity at its other manufacturing sites to mitigate the impact, according to stock market submissions on Sunday.
However, Pegatron, an extremely important iPhone assembler, says it has not been affected by recent moves.
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The issue stems from rising gas and coal prices, and the government wants to reduce the amount of energy used, the report said.
China’s suppression of energy consumption comes from a combination of reasons – rising coal and natural gas prices, as well as Beijing’s efforts to reduce emissions and increase energy demand – and affects a wide range of industries. It comes at a time when global markets have been rocked by a debt crisis that has gripped China Evergrande Group, one of the country’s leading construction companies.
It is not immediately clear whether any of this will have a direct impact on APple’s production plans. The company recently announced a new line of iPhone 13, while new iPad and iPad mini tablets were also introduced. The upcoming unveiling of the Apple Watch Series 7 will also take place in the next few weeks.
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