Foxconn is concerned about water, Intel's factories have to shut down due to electricity requirements, and car manufacturers are also sweating. The reason is the biggest heat wave in 60 years in the province of Sichuan in central China, temperatures that are far too high and hardly any rainfall mean that the technology is already at or beyond its limit.
There has hardly been a problem lately, now central China has been hit. 19 out of 21 cities in the region, which has a population of around 84 million, slightly more than in Germany, have to save electricity. The mixture of high industrial density that cries out for electricity coupled with a constantly growing proportion of air conditioning in the population put a heavy strain on the energy grid. The simultaneous lack of precipitation to around 50 percent of the normal proportion at this time of the year means that hydroelectric power plants produce less energy, so that several factors lead to the current restrictions.
IT and car industry affected
Certain factories are expected to partially or completely shut down production for up to six days. The first had to close the doors on Monday, others have followed since Wednesday. The restrictions are in place until at least Saturday, but according to the local weather report, the heat will not end on the 20th, cooling could take place at the earliest on the 24th, from now 40 degrees to around 30 degrees. In the automotive industry, battery manufacturers Contemporary Amperex Technology Co. Limited (CATL) and directly Toyota and VW are among those hit, in the semiconductor industry Texas Instruments, OnSemi, Foxconn and Intel are mentioned by name.
At Intel, large assembly & Test Manufacturing Fabs represented on campus. According to Intel, a total of 4,000 employees work there, and according to Intel, the site consumes over 60 million kilowatt hours of electricity per quarter. Foxconn said yesterday that the problems with electricity are easier to solve than those with water. “No water is much worse than no electricity,” reporters quote Foxconn's Chairman Liu Yangwei.
The bottom line is that most companies do not expect any major effects as things stand. In part, the Chinese government has already ensured that important sectors of the economy will continue to be prioritized for electricity supply so as not to jeopardize the country's overall economic growth.