Apple makers scramble to tackle power supply issues in China

Suppliers of devices like Apple’s iPhone 13 are scrambling to keep production on track as China runs out of power, a new report says.

From Nikkei Asia:

Widespread power outages in China are reigniting a push by tech makers to move production away from Asia’s biggest economy, with suppliers to Apple, Amazon and others scrambling to keep production on track way ahead of the busy holiday season.

At a mid-sized electronic accessories manufacturer in Zhongshan, Guangdong province, power outages have become the new normal.

A source reportedly said power outages had been sporadic since June but had become regular since September, with suppliers receiving a weekly notice of days when there will be no power. With Apple suppliers having previously warned of a disruption in product supply, the new report warns of growing concern over longer-term issues:

Apple suppliers have previously warned that such cuts pose a threat to supply chain continuity after a week-long power outage in late September. Now concerns are growing that the disruption will prove to be long-lasting.

Another executive said the situation could last until the end of the year “or even longer”, and suppliers were considering their overseas options in places like Vietnam or Indonesia. An Apple supplier manager described the situation as “chaotic and confusing”:

“It’s very chaotic and confusing. Some suppliers have managed to secure electricity supply based on their friendly relations and negotiations with local governments, while others have been badly affected,” he told Nikkei Asia an Apple supplier manager. Many big Chinese tech vendors, such as emerging iPhone assembler Luxshare and its subsidiaries in different provinces, were also spared the power suspension, according to three people familiar with the matter.

Another Apple supplier said local governments prioritize suppliers based on the value of the goods they manufacture. Apple has reportedly asked suppliers for 90-95 million units of its new best iPhone, and is also experiencing supply issues with the Apple Watch Series 7, which goes on sale for pre-order today.

Alan A. Seibert