Widespread Power Outages in China Have Apple Suppliers 'Scrambling' to Keep Production on Track

[MacRumors]

Apple suppliers in China are scrambling to keep production on track ahead of the busy holiday season in the face of widespread power outages in the country, according to a new report from Nikkei Asia.

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

At a midsize electronics accessories maker in Zhongshan, Guangdong Province, power outages have become the new normal.

One source who spoke to Nikkei said power outages had been sporadic since mid-September, but that now they get notice every week telling them which days the following week that power will be cut. Apple suppliers have reportedly already warned that power cuts threaten supply chain continuity, but concerns have grown that the disruption will last until the end of the year or longer.

Suppliers are also reporting a lack of clarity over who will receive power and who won't from one week to the next.

"It is very chaotic and confusing. Some suppliers managed to secure power supplies based on their friendly relations and negotiations with the local governments, while some were affected badly," an executive at an Apple supplier told Nikkei Asia.

Many large Chinese tech suppliers, such as emerging iPhone assembler Luxshare and its subsidiaries across different provinces, were also spared from the power suspension, according to three people familiar with the matter.

Another unnamed Apple supplier said that local governments are deciding who to give electricity to based in part on the value of the products being made.

Apple is looking to boost initial production of this year's ‌iPhone 13‌ models to 90 million units through the end of the year, an increase of up to 20% over the 75 million units of the iPhone 12 series produced last year, according to Bloomberg. There are also reports that initial stocks of Apple Watch Series 7 will be limited, but we won't know for sure until Apple opens pre-orders later today.

Article Link: Widespread Power Outages in China Have Apple Suppliers 'Scrambling' to Keep Production on Track

 

[Bustycat]

It’s President Xi’s millennium plan.🤪

 

[Corsig]

When are we going to stop relying on China for everything

 

[Quu]

What is causing the outages? Lack of fuel? lack of power plants? infrastructure issues?

 

[q64ceo]

Does someone who has knowledge of this explain why China is experiencing rolling blackouts?

 

[q64ceo]

When are we going to stop relying on China for everything

Probably not any time soon. It's hard to find a country with an excess supply of cheap labor. China has 1.6 billion people. Pretty hard to find that anywhere else.

 

[robotica]

Does someone who has knowledge of this explain why China is experiencing rolling blackouts?

Coal shortage in the country, and rising coal prices globally.

 

[haunebu]

Stop making everything in China, Apple.

 

[0924487]

It's because only China is running manufacturing at 20%+ growth over 2019. The world orders are pouring in, and China's power generation companies cannot scale up by that much under the short notice. The growth of electricity demand in China is out of the roof, which is way beyond previous projection.

The other reason is that China has upgraded environmental regulations, it's now more expensive to produce power, both in terms of time and money.

When wind is not blowing or sun is now shining, power shortage is significant.

Nuclear power is the only sustainable solution going forward. Wind and solar just doesn't generate enough power, and they are not reliable sources.

 

[JippaLippa]

Here we go...
There's going to be a war for the m1x macs

 

[TheYayAreaLiving 🎗️]

Dang! This is not a good news at all.

Apple: Please get rid of China. What is it going to take to realize China isn’t good for us anymore! Come onl

 

[0924487]

Probably not any time soon. It's hard to find a country with an excess supply of cheap labor. China has 1.6 billion people. Pretty hard to find that anywhere else.

It's no longer about cheap labour. China's labour is not cheap anymore. It's because no other country has a complete industrial system like China.

Also, China no longer has 1.4 billion people. The real number is probably closer to 1.2 billion, and continue to shrink due to fertility policies.

 

[one more]

And what is causing these power outages in the first place? 🤷🏻‍♂️

 

[one more]

Stop making everything in China, Apple.

Aha, and make it where instead?

 

[0924487]

What is causing the outages? Lack of fuel? lack of power plants? infrastructure issues?

Look above, but in short, it's because of demand - excessive, unexpected surge in export orders. The world has shut down and only China is making stuff.

 

[lightbreakerD]

.

 

[matrix07]

It’s President Xi’s millennium plan.🤪

Chairman tsk tsk.

 

[Shirasaki]

I smell some special stuff in this rolling power outage, and factories manufacturing Apple products are going to get hurt more proportionally.

Unfortunately, moving production out of China will not happen in the next 3-5 years, worse would be during the next decade.

 

[TheYayAreaLiving 🎗️]

Here we go...
There's going to be a war for be m1x macs

Not everyone has $2k+ just sitting. I hope Apple has plenty of them in stock.

 

[Obioban]

What is causing the outages? Lack of fuel? lack of power plants? infrastructure issues?

China got mad at Australia for requesting an investigation into the origins of of Covid and cut off their coal exports as punishment. Australian coal burns more efficiently than much of the rest of the worlds, and Chinese coal plants have been tailored to it-- they can't turn a profit without it. The CCP has a price cap on what power plants can charge for power, so they can't increase prices-- so if they produce power with less efficient coal, they lose money. So, instead they have turned off the power plants.

 

[Obioban]

It's no longer about cheap labour. China's labour is not cheap anymore. It's because no other country has a complete industrial system like China.

Also, China no longer has 1.4 billion people. The real number is probably closer to 1.2 billion, and continue to shrink due to fertility policies.

Certainly some of it is about cheap labor. Almost 50% of the world's solar panels are made in the area of China where slave labor is extensively used, primarily because it's labor intensive and you can't get cheaper than slaves.

 

[Wildkraut]

When are we going to stop relying on China for everything

As long companies put greediness first, we won't.

 

[PBG4 Dude]

Dang! This is not a good news at all.

Apple: Please get rid of China. What is it going to take to realize China isn’t good for us anymore! Come onl

Apple and their financial statements beg to differ. Check out these revenues:

Infographic: How Important Is China for Apple?

This chart shows how much revenue Apple generates in China.

www.statista.com

 

[kazmac]

Sheesh, I feel bad for the families, communities, and small businesses reeling from those power cuts. As if anyone needs that.

Cannot imagine the added stress on the workers in these factories too.

As far as Apple supply delays, this is another legitimate excuse (as they have been over the past year plus given chip shortages etc.)

May everyone who wants a new Apple device get one…

 

[haruhiko]

China is the only thing people can freely attack in this forum. 🤪 oh, another target being Apple itself.