Affected by the shortage of chips, many semiconductor electronics companies across China have recently been forced to shut down, and some have even closed down. Some workers fear that the impact will cause another wave of unemployment.
China’s electronics industry is increasingly difficult due to the shortage of chips. In the Pearl River Delta region of Guangdong Province, some downstream enterprises have to suspend orders due to the lack of chips, or even shut down or close down. According to the 21st Century Business Herald, a small chip is stirring the nerves of the entire Chinese electronics industry. Since the beginning of this year, Liu Qingchun, general manager of Dongguan Zhonghe Vision Technology Co., Ltd. has been anxious about the price increase of the chip. What makes him more anxious is that “the chip not only repeatedly increased prices, and now even if you add money, you can not order the goods.”
According to the report, the chip price surge, downstream enterprises have to face the pressure of rising costs. Under the pressure of the lack of core, many companies fell into the embarrassing situation of a single dare not accept; some companies had to suspend the order, and delayed the shipment cycle.
Chip shortage enterprises shut down for vacation
This week in the WeChat circle of friends circulated a video of enterprises forced to stop work because of the lack of chips. A man filming the shutdown said: “(The factory) has no chips, has been on vacation. Holiday, holiday, holiday, no chip holiday la.”
A number of industry analysts say that the chip shortage and price increases will continue throughout 2021, and downstream companies dependent on it will have to continue to carry the weight under pressure.
China’s cell phone manufacturing, tablet PCs, car manufacturing and other semiconductor industries all need chips, since the second half of last year, the demand for cell phones and semiconductor products has surged, but subject to the limited wafer manufacturing capacity, chip supply exceeds demand.
Financial scholar Commander said in an interview with Radio Free Asia on Thursday (15) that high-tech manufacturing companies in mainland China are most affected by the shortage of chips: “Without chips, it will inevitably cause the cost of these downstream companies to rise significantly, which is currently up to about 30%. In addition, the United States and some Western countries are investigating the theft of intellectual property rights in China, and the entire manufacturing industry in China will be an earthquake.”
On April 12, the first Guangzhou International Electronics and Electrical Appliance Fair opened. A number of electronic enterprises exhibitors disclosed that the chip shortage and price increases have become the most headache for enterprises. For example, some enterprises have orders but dare not take, only to be forced to reduce production. The commander said, “Many companies are subject to the current dilemma of short-term supply of chips and can not be delivered on schedule, resulting in a large number of products default, thus affecting many Chinese companies.”
Chinese cell phone manufacturing, tablet computers, car manufacturing and other semiconductor industries all need chips. Pictured, a woman interacts with a demonstration of Skyworth’s AI chip at the Consumer Electronics Show (CES) Asia in Shanghai on June 13, 2018.
Data show that communication devices, PCs/tablets, consumer electronics and automobiles are the top four downstream industries in China with the strongest demand for chips, with each of the aforementioned industries accounting for between nearly 10% and 30% of global downstream end demand for chips. Some netizens told this station that recently, computers, hard drives and graphics cards have all seen increases of 15% or more.
Low salaries, high unemployment rate workers, people complain
In addition, the shutdown of enterprises has caused a large number of workers to lose their jobs. Mr. Sun, who works in Wuhan, told the station that since the beginning of this year, many companies have shut down and laid off workers due to the lack of chips: “The survival environment is so bad, the whole environment is also bad ah, wages are not high, are laying off people. The country’s newspapers, television said how good, this good that good, Wuhan has recovered. Recover a ghost.”
Huawei Group, a major Chinese communications equipment maker, is close to running out of cell phone chips in its inventory due to U.S. sanctions. Huawei’s phone shipments plunged 40% in the fourth quarter of last year and are expected to fall another 60% this year, leaving it to enter the pig and coal mining industries to save itself.
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