Shanghai Shutdown Throws Supply Chains Into Chaos (Again)
Just as the supply chain issues of the past two years looked like easing somewhat, China has announced a mass shutdown of its largest city Shanghai, throwing the global technology production world into chaos once again.
Shanghai is home to 25 million people, and much of the world’s technology manufacturing. The city is locking down its eastern half from today until Friday, followed by a week-long lockdown of its western side, beginning April 1.
City officials urged the public “to support, understand and cooperate with the city’s epidemic prevention and control work”.
The closure of Shenzhen earliest this month already caused havoc, with Foxconn, the world’s biggest manufacturer of iPhones, being forced to halt production.
The region also houses Chinese giants Tencent and Huawei, as well as the production of vital components needed for everything from television sets and computers, to audio equipment and motor vehicles. TSMC, the world’s largest dedicated chipmaker has a factory in the region, which supplies the likes of Nvidia and Qualcomm.
Tesla’s largest auto factory is located in Shanghai. The ‘gigafactory’ produces half of the company’s vehicles, with 56,515 cars built in the factory during February alone.
The main concern will be the closure of the Yantian container terminal, which processes 90 per cent of China’s electronics shipments. This will cause massive shipping delays, bottlenecks, and price increases – all seen during the supply chain chaos of the past few years.