13 Sep 2022 -

China’s Covid lockdowns and other risks have companies looking to diversify supply chains

Supply Chain trends

China locked down 65 million of its citizens under tough COVID-19 restrictions and discouraged domestic travel during this week’s national holidays, reminding companies that China’s zero-tolerance policies will have consequences for supply chains.

Across the country, 33 cities including seven provincial capitals are under full or partial lockdown covering more than 65 million people, according to a tally published late Sunday by the Chinese business magazine Caixin.

According to Bloomberg, it has virtually paralyzed a city of 6 million that houses much of the country’s electronic information, forcing Apple’s datacenter operator to take emergency measures to shut out the pandemic.

Apple’s partner in Guiyang, which operates the server center that houses all online data generated and stored by hundreds of millions of Chinese iPhone users, described what amounted to a “closed loop” system under which employees are barred from leaving the premises.

Sept. 10-12 was China’s mid-autumn festival, the country’s second-most important holiday after the Lunar New Year. The anti-virus measures have taken a major toll on the economy, travel and society in general, but China’s ruling Communist Party says they are necessary to prevent a wider spread of the virus, first detected in the central Chinese city of Wuhan in late 2019.

According to this report, Apple is accelerating iPhone production in India, a shift that’s closing the manufacturing gap between China and India for the world’s most valuable company.

The move reflects larger trends among global manufacturers that are increasingly looking toward India and other emerging markets as potential hubs outside of China, the world’s current leader in making things. Ongoing COVID-19 lockdowns and slowing growth in the country mean that businesses are considering other options, said Daniel Rosen, a partner at the Rhodium Group, an independent economic research firm.

To avoid electronics supply-chain disruptions, you may also wish to consult an expert in electronics component supply. With more than three decades of supply-chain expertise, Astute Electronics is ideally placed to work with you on your daily component requirements.

For more help with looking at supply chain options, contact Astute Electronics

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