Widespread Power Outages in China Have Apple Suppliers 'Scrambling' to Keep Production on Track
Apple suppliers in China are scrambling to keep production on track ahead of the busy holiday season in the face of widespread power outages in the country, according to a new report from Nikkei Asia.
Widespread power outages in China are reigniting a push by tech manufacturers to shift production away from Asia's biggest economy, with suppliers to Apple, Amazon and others scrambling to keep production on track ahead of the busy holiday season.
At a midsize electronics accessories maker in Zhongshan, Guangdong Province, power outages have become the new normal.
One source who spoke to Nikkei said power outages had been sporadic since mid-September, but that now they get notice every week telling them which days the following week that power will be cut. Apple suppliers have reportedly already warned that power cuts threaten supply chain continuity, but concerns have grown that the disruption will last until the end of the year or longer.
Suppliers are also reporting a lack of clarity over who will receive power and who won't from one week to the next.
"It is very chaotic and confusing. Some suppliers managed to secure power supplies based on their friendly relations and negotiations with the local governments, while some were affected badly," an executive at an Apple supplier told Nikkei Asia.
Many large Chinese tech suppliers, such as emerging iPhone assembler Luxshare and its subsidiaries across different provinces, were also spared from the power suspension, according to three people familiar with the matter.
Another unnamed Apple supplier said that local governments are deciding who to give electricity to based in part on the value of the products being made.
Apple is looking to boost initial production of this year's iPhone 13 models to 90 million units through the end of the year, an increase of up to 20% over the 75 million units of the iPhone 12 series produced last year, according to Bloomberg. There are also reports that initial stocks of Apple Watch Series 7 will be limited, but we won't know for sure until Apple opens pre-orders later today.
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Also, China no longer has 1.4 billion people. The real number is probably closer to 1.2 billion, and continue to shrink due to fertility policies.