Taiwanese businesses in Chinese hub restart unevenly after COVID restrictions

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The word ‘COVID-19’ is reflected in a drop on a syringe needle in this illustration taken November 9, 2020. REUTERS/Dado Ruvic/File Photo

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TAIPEI, April 20 (Reuters) – Taiwanese companies making chips and electronic components reported a mixed picture on Wednesday of the resumption of work in the eastern Chinese city of Kunshan after related restrictions to COVID-19, with some warning deliveries delayed to next month.

China has placed Shanghai under a strict lockdown since late March and neighboring Kunshan has also tightened restrictions to control the country’s biggest COVID-19 outbreak since the coronavirus was discovered in late 2019 in the city of Wuhan.

That had prompted dozens of Taiwanese companies, many of which made parts for the semiconductor and electronics industries, to suspend operations. Read more

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Global companies from mobile phone makers to chips rely heavily on China and Southeast Asia for production and have diversified their supply chains after the pandemic took its toll.

Chip and circuit board substrate maker Unmicron Technology Corp (3037.TW) said its Kunshan plant was gradually resuming operations from Wednesday.

Unimicron, which supplies Apple Inc (AAPL.O) and Intel Corp (INTC.O), said in a statement to the Taipei Stock Exchange that the factory suspended production from April 2-19.

He added that he was “gradually resuming work depending on local personnel and logistical conditions”.

However, Asia Electronic Material Co Ltd (4939.TWO), which makes parts for laptops, mobile phones and digital cameras, said its Kunshan plant would continue to be closed, after initially saying the suspension would last until ‘see you on Tuesday.

He added that he had asked the government for permission to resume work and that he had been given permission to deliver goods and would do so from current stocks.

“It is estimated that some orders will be delayed until May,” the company added in its stock market release.

Flexible printed circuit maker Complex Micro Interconnection Co Ltd (6835.TWO) said some deliveries were not happening until next month, adding that it would review “detailed rules” and ask to resume production.

Bicycle maker Giant Manufacturing Co Ltd (9921.TW) said its e-bike business in Kunshan remained closed, adding that its workers would work overtime to catch up once it was allowed to reopen.

Speaking to reporters in Taipei, Taiwanese Economy Minister Wang Mei-hua said Taiwanese companies were slowly resuming production in China, but there were still logistical problems.

“There is certainly a lot of uncertainty about the impact on supply chains,” she added.

Cheng Ping, CEO of Delta Electronics Inc (2308.TW), a supplier of power components to companies including Apple and Tesla Inc (TSLA.O), was quoted in Taiwanese media on Wednesday as saying that 20% of April production had been affected. by blockages in China.

“Right now, orders are all going and customers are in a rush, rushing us every day,” he said.

Still, news of a resumption of production encouraged shares of Unmicron, which ended the day up 4.51%, outperforming the broader index (.TWII) which closed up 0.91% .

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Reporting by Ben Blanchard; Additional reporting by Sarah Wu; Editing by Muralikumar Anantharaman and Christopher Cushing

Our standards: The Thomson Reuters Trust Principles.


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