US calling on allies to help 'isolate' China says expert
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They fear further disruptions to energy supplies in China could create havoc in the tech supply chain t a time when the industry is gearing up for peak production season ahead of Christmas. Several companies including key Apple suppliers have already said they have had to halt or reduce operations at facilities in Jiangsu province, China’s industrial tech heartland. It comes after local governments restricted the supply of electricity for industrial use until the end of the month.
The limits came following Beijing’s warning that it would strike down hard on provinces that miss their annual energy consumption reduction and climate change goals.
The Financial Times reports that the measures have now impacted a wide range of key suppliers to Apple, Tesla, Microsoft, HP and Dell.
They are also said to have disrupted production at the world’s top chip-packaging and testing suppliers to Qualcomm, Nvidia and Intel.
Companies are now warning that further energy disruption in October would create irreversible knock-on effects in the run-up to Christmas.
An executive of an iPhone supplier told Nikkei Asia: “We are currently reviewing the inventories for all the components and parts we have in stock.
“The situation is still controllable at the moment, but we fear it will happen again.
“It will be a huge disruption if we run out of inventory [in October].”
ASE Technology Holding – the world’s biggest chip-packaging and testing service provider and a key supplier to Apple – said had complied with the government’s energy-saving policies but had arranged shipments ahead of time to mitigate the impact on its customers.
Some suppliers in Jiangsu have reportedly managed to negotiate with local governments and agreed to cut their electricity use by at least 10 to 30 percent in order to continue operating.
Companies have taken a range of measure to meet its production output.
They range from idling production lines to reducing “non-essential” energy use and relying on existing inventory to fill orders in the short term, Nikkei Asia has learned.
Some companies are arranging for employees to work additional hours during the Golden Week holidays from October 1.
The power disruption comes as China’s President Xi Jinping pushes ahead with his goals to target climate change, having said its carbon emissions will peak by 2030.
Last year, China stopped buying coal from Australia, which used to be the country its main foreign coal supplier.
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But it has reportedly suspended that tough stance in the wake of its issues.
Energy research firm Kpler reported that a total of five vessels waiting offshore released 383,000 tonnes of Australian steam coal to China last month.
Nick Ristic, chief dry cargo analyst at Braemar ACM Shipbroking also said that Australian cargo waiting outside a Chinese port has been moored last month since the ban came into effect a year ago. He reported that 450,000 tonnes of coal were discharged.
Policymakers in Beijing have not given any indication of whether China will be importing any more Australian coal.
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