[Asia Economy Reporter Kim Suhwan] Concerns have emerged that China's severe power shortage will further worsen the semiconductor component supply shortage in the electronics and automotive industries.
Chinese economic media Caijing reported on the 7th, citing industry insiders, that power supply restrictions are seriously affecting some semiconductor supply chains within the country, and the repercussions could extend to American electronics and automotive companies such as Apple, Tesla, Microsoft, HP, and Dell. It also forecasted that semiconductor companies like Qualcomm and Intel would be impacted.
An industry insider said, "The impact of the current power supply restrictions on China's semiconductor supply chain is significant, especially the shock experienced by companies in Jiangsu and Guangdong provinces is the most severe. Once the supply of products such as substrates, electronic materials, and light-emitting diodes (LEDs) is halted, it causes a massive impact on the entire supply chain."
He added, "Even if some small supply chain companies are affected, the impact can spread to larger companies. The supply chains in the electronics industry are interconnected."
Caijing, citing a report from Nikkei Asian Review, reported that ASE Technology Holding Co., Ltd. (Leweiguang, 日月光), the world's largest semiconductor back-end processing company, is already reducing power consumption in accordance with Chinese government policies.
Leweiguang is a company responsible for back-end processes such as packaging and testing, receiving semiconductors from Qualcomm, Apple, Nvidia, and others to produce final products. If bottlenecks occur here, semiconductor products may not be supplied to end consumers on time.
PEGATRON, an iPhone assembly company located in Jiangsu Province, is also reducing its total electricity usage by more than 10%.
China Tianfeng Securities warned in a report that the severe shortage of inventory for the recently released iPhone 13 continues. It also pointed out that the biggest problem Apple faces is the shortage of component supplies.
Recently, in China, a severe power shortage has occurred due to a combination of global raw material price surges causing coal supply shortages and the Chinese government's stringent carbon emission reduction policies.
Accordingly, among the 31 provinces and municipalities in China, more than 20 have implemented 'power restriction measures' since mid-last month, reducing or completely cutting off electricity supply to factories.
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