The Strategist

China's battle for the environment jeopardises Apple's production

09/28/2021 - 06:16

The Chinese authorities, in their struggle to save the planet, have imposed restrictions on electricity consumption, which resulted in a shutdown of factories supplying components, including for Apple products. This, in turn, has put the supply chain at risk at the peak of electronics sales, writes Reuters.

In particular, electronic components manufacturer Foxconn, which is the main supplier to Apple, has announced of a temporary work stoppage at its facilities in China. Concraft Holding, which supplies headphone components to Apple, also announced changes to its work schedule. The supplier is using its stock to meet demand during the shutdown.

Unimicron Technology Corporation, an Apple partner, announced on September 26 that it would halt production at its three subsidiaries in China from September 26 to September 30 to comply with new local government policies. Unimicron Technology said production would continue at other plants.

Production was suspended, according to analysts, due to China's insufficient coal supply and the government's reduction of carbon dioxide emissions allowance in the country's. At the same time, coal is one of China's main energy sources, and clean energy capacity has been insufficient. As a consequence of the resulting energy shortage, the authorities imposed restrictions on energy consumption.

Heavy industry in several regions of China has suffered because of these actions. In addition, GDP growth is expected to slow down, which has already been adversely affected by climate change and the worst outbreak of the coronavirus since early 2020.