China rocked by power crunch as Apple, Tesla suppliers suspend work

China is grappling with growing power shortages, prompting many factories — including suppliers to Apple, Tesla and other major global companies — to curb or suspend operations.

The power crunch comes as strict orders from Beijing to cut emissions collide with surging coal and gas prices as well as rising demand for electricity.

Apple supplier Unimicron Technology said that three of its China subsidiaries stopped production from midday Sunday and won’t resume until midnight on Sept. 30 in order to comply with local regulations.

Though the Taiwanese maker of printed circuit boards added that other factories will pick up the slack in production.

Eson Precision, a Foxconn affiliate, similarly said it’s suspended production from Sunday until Friday at its facilities in the city of Kunshan, near Shanghai.

Concraft Holding, another Apple supplier that owns plants near Shanghai, said it would suspend production until Thursday but would tap existing inventory to meet demand.

The critical semiconductor industry, which has already been struggling to keep up with demand during the pandemic, is also getting hit.

Several chip packaging and testing service providers that supply major global companies like Intel, Nvidia, and Qualcomm received notices to suspend production at facilities in Jiangsu province for several days, people with knowledge of the matter told Nikkei Asia.

Chang Wah Technology said in a filing with the Taiwanese stock exchange that it had to comply with the government’s order to stop production from Sunday through the end of the month.

The crisis is beginning to move from factories into homes, with Guangdong province directing residents to limit power consumption by using natural light and less air conditioning, according to Bloomberg.

While much of the attention on China has been captured by the potential collapse of Evergrande Group, the second-largest real estate developer in China, the power crunch could have a lasting impact on China’s economy, according to Nomura analysts.

“With market attention now laser-focused on Evergrande and Beijing’s unprecedented curbs on the property sector, another major supply-side shock may have been underestimated or even missed,” Nomura analysts wrote in a note over the weekend, predicting China’s economy will shrink this quarter.