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Apple suppliers Foxconn and Unimicron cut production amid COVID restrictions in China

Apple suppliers Foxconn and Unimicron cut production amid COVID restrictions in China

A medical worker in protective gear takes a swab from a worker for nucleic acid testing at a Foxconn factory, following new cases of the coronavirus disease (COVID-19) in Wuhan, Hubei province, China on August 5, 2021. Picture taken August 5, 2021. China Daily via REUTERS

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TAIPEI, March 14 (Reuters) – Apple (AAPL.O) suppliers Foxconn (2317.TW) and Unimicron Technology Corp (3037.TW) said on Monday they had suspended operations in the Chinese city of Shenzhen, after the technology hub has imposed measures to stem an outbreak of COVID-19.

Shenzhen, known as China’s Silicon Valley, is carrying out mass testing after dozens of new local cases were recorded in the southern city. Authorities have suspended public transport and urged people to work from home this week as much as possible. Read more

Foxconn, officially known as Hon Hai Precision Industry Co Ltd, said its operations in Shenzhen would be suspended until further notice, adding that it would deploy emergency factories to reduce production disruptions.

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Two sources familiar with the matter told Reuters that operations of Foxconn and its subsidiaries in Shenzhen would be suspended for the first half of the week.

One of the people said the government allowed businesses to operate if they could create a “closed management” system where employees lived and worked in a bubble, cut off from the general public. Such a system was in place during the Beijing Winter Olympics.

Chip substrate and printed circuit board maker Unmicron Technology also supplies Intel and flexible printed circuit board maker Sunflex Technology Co Ltd. Sunflex said its plant would be closed until Sunday.

Apple and Intel did not immediately respond to requests for comment.

China is battling its biggest COVID-19 outbreak since the pandemic began. Several provinces and cities have tightened restrictions in line with Beijing’s “dynamic clearing” ambition to suppress the contagion as quickly as possible.

Authorities have locked down the city of Changchun, the capital of northeast Jilin province, and closed schools in the financial hub of Shanghai.

Toyota (7203.T) said on Monday that its joint venture with Chinese group FAW had suspended production in Changchun, while its operations in the city of Tianjin were unaffected.

FAW, headquartered in Changchun, also has a joint venture with Volkswagen (VOWG_p.DE). The two companies did not immediately respond to a request for comment.

Other companies that have reported an impact on their operations from China’s COVID-19 measures include electronics component maker Sanyou Corp and Qingdao Guilin Environmental Technology (300786.SZ).

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Reporting by Sarah Wu, Ben Blanchard and Yimou Lee in Taipei, Norhiko Shirouzu in Beijing; Additional reporting by Josh Horwitz in Shanghai; Written by Brenda Goh; Editing by Christopher Cushing, Muralikumar Anantharaman and Jane Wardell

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