A fresh wave of lockdown in China's Shenzhen is, once again, threatening to bring the supply chain to a standstill. Major manufacturers, including Foxconn, have been forced to suspend production in the city, which could delay shipments of smartphones and other tech products.

According to a recent report from Nikkei Asia, the Shenzen government has halted public transportation in the city from today till March 20. In addition, the government has instructed all industrial parks and residential areas in the city to adopt lockdown measures. As a result, major tech companies and manufacturers operating in Shenzhen, including Apple supplier Foxconn, have suspended operations in the city.

The report further adds that "Shenzhen is Foxconn's second-largest manufacturing hub in China, after Zhengzhou in Henan Province, which is the world's biggest iPhone production center. Much early engineering prototyping and research and development work is conducted at the campuses in Shenzhen." But due to the new lockdown measures, the company has suspended production at its Longhua and Guanlan factories in Shenzhen until further notice from the local government.

To minimize the impact on the supply chain, Foxconn has "adjusted the production line" to other plants in China and would be requiring all employees to take P.C.R. tests, according to an official statement. However, the lockdown might still have an impact on the delivery times of your new iPhone.

The Shanghai city government has also issued similar instructions, urging residents to stay at home until absolutely necessary. But the government is yet to impose a strict lockdown. For the unaware, Shanghai is China's most important semiconductor manufacturing center. If the city were to go into a similar lockdown, it could significantly impact the supply chain.

The fresh wave of lockdowns in Shenzhen and Shanghai might disrupt global supply chains. Last year, an outbreak in Shenzhen halted port operations leading to a surge in international shipping rates and the prices of goods. At the moment, the Shenzhen government hasn't suspended port operations, though.

Source: Nikkei Asia

Via: NY Times