China exempts key factories to avert supply chain crisis

Chinese authorities have moved to head off a looming supply chain crisis as proliferating pandemic lockdowns take their toll on the economy.

The Shanghai Economic and Information Technology Commission announced it had selected 666 local companies for exemption from the lockdown.

Its “white list” includes at least 66 companies from the chip sector, among them chip fabs TSMC and SMIC, and Dutch equipment-maker AMSL, along with many auto and energy firms.

Commission officials did not disclose the criteria for granting the exemptions.

Shanghai, China’s biggest city, has been in lockdown since late March under the national government’s strict zero-COVID policy. Other locations, including Shenzhen, Guangzhou and towns near Shanghai, have also been affected to varying degrees.

High viral load

The strategy to prioritize the pandemic over the economy means potentially significant knock-on effects to GDP growth and the global supply chain. The Yangtze River Delta region, with Shanghai at its heart, accounts for 37% of China’s total exports.

Research firm Omdia has warned the expanding lockdowns could cause “significant disruptions in the global supply chain for electronic components and consumer electronics.”

To read the complete article, visit Light Reading.