Oct 2021

Power Restriction in China

The universal challenge of containing a pandemic continues to be felt across the industry. For example, China reports that the current upturn in global economic demand led to energy consumption exceeding supply.

When China is pushing to demonstrate its global credentials, placing further control around the mining of fossil fuels, the strain on the existing resource and infrastructure becomes too much. Power limitations have increased over recent days, and total power outages are now frequent.

Whilst the cost to residential areas, particularly those in the colder North East of China, is high, there have also been consequences to industry, and electronic technologies, including those directly related to the further need for green energy technology.

With coal resources dwindling at the time of writing, electricity shortages are prevailing across the majority of mainland China.

These shortages are now impacting all industries. Consequently, economic observers are now considering the Chinese economy will grow by half of one percent less at 7.8% than had previously been forecast.

This energy deficit affects our factory base, extends lead times, and puts further pressure on the global PCB raw materials supply chain, which is already struggling to balance soaring demand.

  • Our factory-based teams coordinate across all parts of the manufacturing process to deliver our order confirmations.
  • Our factory teams notify of total power outages as practically and as soon as possible after the resumption of power, allowing a quicker understanding of which work orders could be affected and expediting upon resumption of power.
  • We have daily meetings with senior factory management to confirm all planned regional government power shedding activity.
  • We are putting extra resources to monitor known bottlenecks in production, watching the whole factory WIP, ensuring orders are progressing as smoothly and fast as possible.
  • Identifying actors that could affect the likely number and severity of power outages by province we operate in and then using that data to quote new business from our factory based in regions that are likely to be less impacted.

Whilst the most challenging current conditions are in the North East. Suppose the countermeasures that the Chinese Government have put in place do not work in the concise term. In that case, this will likely start to become another significant Global Supply Chain shock with the potential to exceed the issue currently being experienced in many industries due to electronics components shortages.

Our customer teams will update you regularly on current lead times and your order schedules, allowing us to plan a conversation should you be concerned about the extent of your order schedules.