Laptop Supply Chains Hampered by Fresh Lockdowns

Thanks to a new coronavirus outbreak in Shanghai, the government has implemented rules requiring people to work from home when possible and it’s restricted the movement of labor within busy workspaces. These rules are already affecting production, reports Taiwan financial publication Commercial Times, as factories slow or temporarily suspend work. Another Taiwanese publication, Liberty Times, reports factory employees are even eating and sleeping at work so manufacturers can avoid restrictions on the number of employees allowed to enter, as well as comply with updated COVID-19 screening procedures.

Among those affected are contract laptop manufacturers Compal (which makes devices for Acer, Apple, Dell, HP, Lenovo, and Toshiba), Pegatron (Apple, Asus, Lenovo and Microsoft) and Wistron (Acer, Dell, HP, Lenovo, and Xiaomi). Monitor manufacturer AUO and semiconductor maker Nanya, along with several PCB factories, are also facing the impact of China’s updated regulations. The suspensions are expected to affect TV and smartphone manufacturing as the government seeks to “[let] the city calm down, slow down, cooperate to fight the epidemic, and look forward to the future.”

Manufacturing delays prompted by COVID-19 are nothing new at this point. News about supply chain woes is just about as expected as the weather forecast. Some have figured there was hope on the horizon with global COVID-19 cases taking a dip during the fall, but the new BA.2 Omicron subvariant has influenced many governments to renew their spread-prevention measures.

It’s worth noting that these companies have multiple factory locations, many outside of China. Pegatron, for example, has plants in Taiwan, Mexico, and Indonesia, while Wistron has some in Taiwan, Mexico, Malaysia, and Vietnam. It’s unlikely that production will be choked off completely with such a geographical spread. That being said, Shanghai—the nearest large city to Kunshan—is reportedly experiencing the strictest lockdown it’s experienced in the last two years, so it’s difficult to tell exactly how bad delays will get in China. More than 10,000 health professionals have been sent into Shanghai over the last week in an effort to maintain what it calls its “zero-COVID” strategy.