The nation’s electronics sector could face disruptions in raw material supplies as early as next month due to the COVID-19 outbreak in China, the Taipei-based Chinese National Federation of Industries (CNFI, 全國工業總會) said on Saturday.
Citing a survey of its 157 member companies, the group said that tech companies are concerned about the availability of raw materials, as many Chinese manufacturers have not yet returned to full production since reopening on Monday last week after several extensions of the Lunar New Year holiday break.
Lockdown policies in at least 48 cities and four provinces across China, and travel restrictions that have shut down highways, railways and public transportation systems have restricted the movement of millions of people and limited the size of factory workforces at numerous plants.
The CNFI said that the electronics sector has been severely affected by the city lockdowns.
Many Taiwanese electronic components makers have built clusters of production sites in Hubei and Guangdong provinces, the two regions hit the hardest by the COVID-19 outbreak, and city lockdowns to restrict movement are the last thing tech companies want, the industry group said.
Hubei’s capital, Wuhan, the center of the outbreak, and neighboring Xiantao and Huangshi have become a production hub for many Taiwanese printed circuit board makers, but these cities have been sealed off and raw material shipments interrupted, the group said.
Even when manufacturers secure approval from local governments to resume production, workers have to stay in quarantine for 14 days before starting production line duty, which has slowed output, it said.
As for the biotech industry, many drug manufacturers in Taiwan are expected to soon face raw material supply shortages from China as their inventories run out, CNFI said.
The outbreak has also hurt private consumption in China, which would affect Taiwanese makers of consumer electronics items, such as chip and optoelectronic products, it said.
Under such unfavorable circumstances, some small and medium-sized enterprises in Taiwan are expected to face capital shortfalls as their operations deteriorate, it said.
Those organizations would still have to pay salaries, rents and loan interest, so their financial burden would be heavier until production returns to normal, the group said.
Many businesses are hoping the government would help them negotiate with banks to resolve possible funding issues, it added.
DEJA VU: Echoing the probe into real-estate giant Evergrande Group, the bank is under Beijing police scrutiny after last week, telling investors it is ‘severely insolvent’ Chinese authorities said they recently opened criminal investigations into Zhongzhi Enterprise Group Co’s (中植企業) money management business, days after the embattled shadow banking giant revealed a shortfall of US$36.4 billion in its balance sheet. Police in Beijing said in a statement on WeChat that they took “criminal mandatory measures” against multiple suspects, identifying one by their last name, Xie (解). They urged investors to report cases or provide leads to the authorities, including filing complaints online. Xie Zhikun (解直錕), the group’s founder, died in 2021, but several of his relatives are executives at the company. The statement did not elaborate on what
CONSIDERATIONS: The NSTC instructed the park to assist laid-off workers and urge companies to use furlough programs to ease the effects of falling demand Firms in the Hsinchu Science Park (新竹科學園區), which houses major tech companies, reported laying off 496 employees last month amid weakened global demand, Hsinchu Science Park Bureau director-general Wayne Wang (王永壯) said yesterday. Wang told a news conference that 48 companies in the science park laid off employees last month, including one hard disk supplier which let go 241 employees as part of a plant closure due to falling demand. Other companies reported sporadic layoffs as they adjusted to weakening demand, he said. Wang made the remarks after local media reported the layoffs over the weekend. Although the global economy is struggling with high
Yageo Corp (國巨), the world’s third-largest multilayer ceramic capacitor supplier, said that it had acquired France-based Schneider Electric’s sensor business in a deal worth about 723 million euros (US$788.26 million). The acquisition of Telemecanique Sensors early this month matched Yageo’s shift in strategy to offer premium products, the company said in a statement on Tuesday. Yageo expects the deal to broaden its product portfolio and raise its gross margin substantially next year, given that Telemecanique Sensors focuses on making higher-margin chips for industrial devices, the company told investors during an online conference on Oct. 26. Yageo’s gross margin fell to 33.2 percent last
NEW TREAD: The Taiwanese shoe brand paired with TSMC to turn silicon waste into a circular economy good, following its success making shoes from coffee grounds Ccilu International Inc (馳綠國際), a Taiwan-based footwear brand, has become the first company in the world to turn silicon waste from contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) into eco-friendly shoes. Last year, the global footwear industry saw the first pair of pressure-relief slippers made from recycled silicon waste by Ccilu. The brand continued to unveil follow-up collections, including sports shoes and massage slippers made from the same materials. In an interview with CNA, Ccilu CEO Wilson Hsu (許佳鳴) recalled the company’s innovation of the first pair of slippers made from silicon waste after its silicon waste treatment partner, Semisils Applied Materials