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Apple’s iPhone hit by China’s power shortages

14th Oct 2021 by Graham Buck

Apple's production of its new iPhone 13 is likely to be limited by the global shortage of microchips, reports suggest.

According to Bloomberg, the group planned to produce 90m units of the new iPhone models before the end of 2021, but the total could be reduced by up to 10m as Apple's chip suppliers, including Broadcom and Texas Instruments are struggling to deliver components.

Cutting down

A seperate report by the Financial Times states that manufacturers are warning that further disruptions to energy supplies in China would impact on the tech supply chain just as the industry is gearing up for peak production season, including output of the latest iPhones. Several companies including key Apple suppliers have announced they have temporarily halted or reduced operations at facilities in Jiangsu province.

Tech industry executives told Nikkei Asia that enterprises in cities across Jiangsu were ordered to reduce their energy usage by between 10% and 30% during the last week of September, or in some cases to stop using electricity completely.

The orders were in response to a warning from Beijing warning that stricter punishments would be imposed on provinces that fall short of their annual energy consumption reduction and carbon-cutting goals. In August China's National Development and Reform Commission censured warnings many provinces – including the industrial hubs of Jiangsu, Guangdong and Hubei – of using too much energy and failing to meet the country’s call to “control energy use and carbon emissions” in the first half of 2021.

In addition to Apple's suppliers, the measures have affected Tesla, Microsoft, Hewlett-Packard and Dell and also disrupted production at major chip-packaging and testing suppliers to Qualcomm, Nvidia and Intel.

Back to coal

With China's electricity shortage impacting on manufacturers and threatening to undermine the country's status as the world’s capital for reliable manufacturing, the authorities have now announced moves to mine and burn more coal, despite previous pledges to reduce the emissions that cause climate change.

Mines that were closed without authorisation or for repair work have been ordered to reopen, together with mothballed coal-fired power plants. Tax incentives are being drafted for coal-fired power plants, while Regulators have ordered Chinese banks to provide loans to the coal sector. Local governments have been warned to be more cautious about limits on energy use that had been imposed partly in response to climate change concerns.

“We will make every effort to increase coal production and supply,” said Zhao Chenxin, the secretary general of the National Development and Reform Commission at a news briefing on 13 October in Beijing.

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