Everstream Analytics monitors and produces a weekly summary of supply chain impacts due to the ongoing COVID-19 pandemic. The update is provided free-of-charge to the industry.
Kunshan COVID-19 Outbreak and 5 Day Lockdown
- The outbreak and lockdown have not been picked up yet by mainstream international media.
- Kunshan, a city west of Shanghai, has gone into lockdown for five days. The city is a major electronics hub for Taiwanese companies, producing everything from printed circuit boards to structural components for the consumer electronics, automotive, and other industries.
- Some large Taiwanese suppliers have already shut down their subsidiary operations in Kunshan, including Unimicron Technology, Eson Precision, and Elite Material (EMC). Everstream has already tracked more than 15 companies that have had to shut down due to the lockdown.
- Unimicron supplies printed circuit boards to customers such as Apple, while Eson Precision is an affiliate of Foxconn, the large electronics contract manufacturer that builds iPhones for Apple. Eson Precision also supplies components to car maker Tesla.
- We have received intelligence that the other two large electronics contract manufacturers that supply Apple, Pegatron and Wistron (both Taiwanese), have also suspended operations in Kunshan due to the outbreak.
- As the lockdown in Shanghai, initially planned for five days in two parts of the city (Pudong, Puxi), has been extended, there is a high risk that if COVID-19 cases won’t drop significantly in the next five days, the lockdown in Kunshan might be extended as well, causing serious disruption to the supply of electronics components and likely causing/extending production downtime at key customers such as Apple and Tesla.
- For comparison, the lockdown in Suzhou, another critical electronics manufacturing hub near Shanghai, in February lasted for about ten days, while the lockdown in Xi’an, which also hosts semiconductor manufacturing facilities, lasted for four weeks. It is very likely that, given the severity of the current outbreak in China, with more than 13,000 cases registered daily – the most since the lifting of the Wuhan lockdown in 2020 – that electronics and automotive supply chains will experience significant disruption due to supplier outages in the coming 7-10 days.