Apple, Intel, and Nvidia Suppliers Stop Production Due to China Mandated Power Shutdowns

[CommanderAlex]

[IMPORTANT]: DO NOT INVOLVE POLITICS AND FOCUS ONLY ON THE TECHNOLOGY SIDE. 

 

Summary

China is one of the largest consumer's of energy. In the effort of reducing it's emissions and reducing price surges related to energy carriers, China has decided to temporarily shutdown power to several manufacturing centers. China plans on limiting electricity on a scheduled basis going into the future. As of 2019, 64-65% of China relied on coal-fired electrical power plants to produce the electricity. Last week, President Xi Jinping vowed at the UN General Assembly to not build a new single new coal-fired electrical power plant. 

 

Quotes

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To control CO2 emissions, the government of China demanded that Jiangsu, Zhejiang, and Guangdong provinces (where many high-tech producers are located) cut their total energy consumption. Since it's impossible to implement new energy-saving technologies or install new energy-efficient equipment quickly, local governments in several provinces plan to cut the electricity supply to industrial customers and malls for several days each month, according to a Nikkei report.

As a result, this will reduce CO₂ emissions in the area and commodities such as coal, oil, and natural gas to help energy producers maintain low prices and help stabilize their business. Since a large chunk of electronics are produced in China, this will put extra strain on the already strained electronics and semiconductor industries.

 

Other companies will have different ways of handling this issue, 

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Furthermore, enterprises paying more taxes or smaller firms engaged in advanced, specialty, and state-of-the-art technology segments will not be affected by power outages, according to DigiTimes, citing anonymous sources with knowledge of the matter.  

 

Foxconn, the world's largest electronics manufacturing services (EMS) provider, did shut down its production facilities in Longhua, Guanlan, Taiyuan, and Zhengzhou as of early Monday, according to Nikkei. Foxconn is Apple's No. 1 production partner, making iPhones, iPads, MacBooks, and a myriad of other products. 

 

Pegatron, another major iPhone assembler, told Nikkei on Sunday night that its production facilities operated as usual. Meanwhile, the company has diesel power generators ready, and if authorities order it to halt local operations due to power constraints, it can use them. 

 

Some manufacturers will not be shutting down due to how their business operates, such as the manufacturing of semiconductors. As a result, TSMC and UMC semiconductor fabrication plants will continue to operate as normal. 

 

My thoughts

 This is going to be an interesting future now with the power limits China is placing throughout these manufacturing regions. With the current semiconductor shortage, perhaps this can allow companies such as TSMC the time to produce the silicon ahead of the rest of the packaging materials they sit on. Although, I don't know if those companies are affected by the shut down too, which would result in a very messy situation moving forward with supply chains. 

 

Sources

Tom's Hardware

BBC News

ABC News

[Rex Hite]

Excellent.

[thechinchinsong]

I guess this is a good thing for the environment, but it seems like it'll impact consumer prices for a variety of products.

[Estiar]

Shutting down factories is a very expensive interruption. It won't surprise me if some companies move out of the region, if they expect this in the future. That comes with a lot of overhead. On the other hand we may simply see the price of chips go up even further to keep these factories profitable.

 

[Sauron]

It was fun while it lasted I guess, goodbye computers, I liked you

[CT854]

When the price of coal goes up because of outsized demand and your primary source of energy is burning coal, it's hard to keep the lights on. This is seeming like a pretty big watershed moment when it comes to China's coal reliance.
 

The New York Times has a piece on this as well. Worth a read.

[CommanderAlex]

Just now, CT854 said:

When the price of coal goes up because of outsized demand and your primary source of energy is burning coal, it's hard to keep the lights on. This is seeming like a pretty big watershed moment when it comes to China's coal reliance.
 

The New York Times has a piece on this as well. Worth a read.

Yeah, it's going to become crazy I imagine going into the future with these power cutbacks. 

 

I would have read the article, but unfortunately, I am not a subscriber to The New York Times.

[Brooksie359]

2 hours ago, CT854 said:

When the price of coal goes up because of outsized demand and your primary source of energy is burning coal, it's hard to keep the lights on. This is seeming like a pretty big watershed moment when it comes to China's coal reliance.
 

The New York Times has a piece on this as well. Worth a read.

I though they were investing heavily into nuclear power plants which would fix this issue? Maybe they aren't operational yet? Anyways I wonder if this would make more companies try and create their own sources of power to power their businesses like some places do via solar panels or wind turbines. Honestly speaking as much as I hate increased prices for electronics I don't mind if it results in less coal being burned. 

[poochyena]

I heard about this earlier in an anime convention vendor/artist alley thread. Sounds like its going to affect nearly everyone in one way or another.

 

Spoiler

 

3 hours ago, CommanderAlex said:

China is one of the largest consumer's of energy.

This is technically true but I always hate the phrasing since the only reason for this is because companies from other countries outsource their manufacturing to China.

[PocketNerd]

3 hours ago, thechinchinsong said:

I guess this is a good thing for the environment, but it seems like it'll impact consumer prices for a variety of products.

Fun fact: Tackling climate change and the environment was ALWAYS going to result in more expensive shit. Especially in the short term.

 

That said, good initiative. Hopefully this incentivizes additional manufacturing elsewhwere to offset the load and move production to cleaner sources of energy.

[leadeater]

1 hour ago, Brooksie359 said:

I though they were investing heavily into nuclear power plants which would fix this issue? Maybe they aren't operational yet? Anyways I wonder if this would make more companies try and create their own sources of power to power their businesses like some places do via solar panels or wind turbines. Honestly speaking as much as I hate increased prices for electronics I don't mind if it results in less coal being burned. 

They were, some of those efforts were impacted by advanced nuclear technology trade restrictions. Others just aren't ready yet. I also seem to remember China is in the middle of building an epically massive Solar farm as well.

 

https://www.nsenergybusiness.com/features/largest-solar-plants-china/

 

22 minutes ago, poochyena said:

This is technically true but I always hate the phrasing since the only reason for this is because companies from other countries outsource their manufacturing to China

And they have the most population and a huge national land area so it is a little defacto that they would use the most. It's more surprising that they don't use as much more than they currently do relative to population size compared to say the US. But lets not go down that path too much.

 

Also won't be too long until we get similar stories about India, well if rolling blackouts in many areas wasn't already a thing there quite often.

[poochyena]

9 minutes ago, leadeater said:

It's more surprising that they don't use as much more than they currently do relative to population size compared to say the US.

Not really surprising since much of the country is still developing, much like India. Energy usage has more connection to average wealth than population size.

[leadeater]

7 minutes ago, poochyena said:

Not really surprising since much of the country is still developing, much like India. Energy usage has more connection to average wealth than population size.

I know, part of the conversation track I didn't want to go down too much. It's the whole wealth thing I was alluding to, I just don't want to get in to the whole why's and how's but suffice to say in both China and India average wealth is increasing.

 

Edit:

 

P.S. Damn Iceland, slow your roll

[Elisis]

25 minutes ago, leadeater said:

P.S. Damn Iceland, slow your roll

At least they mostly use geothermal I guess...? Helps offset their voracious power demands that come from being one of the principle aluminium refiners.

[Dracarris]

58 minutes ago, leadeater said:

P.S. Damn Iceland, slow your roll

I think the picture changes a lot if you consider energy instead of electricity only per capita. I guess the European countries and Canada are only so far up due to electrical heating, usually from renewables.

[DrMacintosh]

Is this why my 13 Pro Max won't arrive until November 1st? 

[TheReal1980]

The used computer market will THRIVE!

[Lightwreather]

WEll.....

Hopefully, this shifts China's focus of energy from coal to Renewables and/or Nuclear energy sources.

That being said, Hooray for even more price increases on top of the already expensive market of 2021 /s

[Mihle]

4 hours ago, Elisis said:

At least they mostly use geothermal I guess...? Helps offset their voracious power demands that come from being one of the principle aluminium refiners.

Correct, geothermal, electricity is cheap there.

 

They are actually currently looking at the possibility of building more geothermal and for example use it to make hydrogen to export. To help other places having less impact on the environment, and get some income.

[Arika]

maybe don't have 90% of the supply chain go through one country?

[suicidalfranco]

Just now, Arika S said:

maybe don't have 90% of the supply chain go through one country?

B-b-b-but ma cheap slave labor

[Moonzy]

6 hours ago, Arika S said:

maybe don't have 90% of the supply chain go through one country?

it's better to have manufacturing byproducts to be dumped in one location than having it spread

keeps other countries clean

 

im half serious

[Rex Hite]

Pollutants and waste is an outsourced product, just like any other.

Maybe China is looking ahead and has decided it doesn't like what it sees. Maybe China is going to weigh the benefits of a manufactured product against the waste it generates  I imagine toys will have a particularly skewed weight factor.That's a consideration that those who outsource their waste don't have to make.

[mr moose]

I laugh at them, they put tariffs on Aussie coal,  caused it to sit in ports on ships and reduced imports by almost 82% at one stage.  In their efforts to punish Australia they shot themselves in the foot.   Hope it hurts like fuck for them.

 

https://www.abc.net.au/news/2020-12-17/australian-trade-tension-sanctions-china-growing-commodities/12984218

 

They can't blame anyone else but themselves for this.

[Kisai]

8 hours ago, Mihle said:

Correct, geothermal, electricity is cheap there.

 

They are actually currently looking at the possibility of building more geothermal and for example use it to make hydrogen to export. To help other places having less impact on the environment, and get some income.

This is one of the few situations where "excess" electricity being generated is even possible. However nobody really knows how long a geothermal well lasts, with estimates being 30 years. Compare that to Hydroelectric dams which are basically infinite as long as it sits in a geographically stable environment and the turbines are maintained.