Power rationing measures in China have forced many Taiwanese tech companies to limit production in several provinces. In some areas such as Sichuan province, operations at big industrial plants have been put on hold until Aug. 20. But experts say that the power cuts won’t have a big impact on the laptop industry as a whole. They say that an abundance of inventory and lower demand mean their impact won’t be comparable to the disruption from COVID lockdowns earlier this year.

It’s the middle of the day, but inside, it’s pitch black. The machines are completely silent and line workers at this factory in China sit still at their posts. Temperatures are unusually high in China’s Sichuan province, and the government has ordered big industrial electricity users to halt operations from Aug. 15 to Aug. 20. The order has severely disrupted laptop supply chains. Reports say that over in China’s Jiangsu province, which is a laptop making hub, companies have adopted staggered power use for similar reasons. Taiwanese tech giants with plants in China such as Quanta Computer, Compal Electronics and Wistron are facing major challenges.

Yen Su-chiu
Taiwan Electrical and Electronic Manufacturers’ Association
These electricity rationing measures are not just cutting power in a certain area. They are imposed by areas, for at most five days. I think that the impact on Taiwanese businesses shouldn’t be too big. As everyone knows, there is plenty of inventory. So this can be used as an opportunity to make adjustments to the structure of operations.

The Taiwan Electrical and Electronic Manufacturers’ Association says that due to the soaring demand for electronics during COVID, manufacturers have ramped up production. That has resulted in an abundance of inventory for laptops, which should be enough to last until the first quarter of 2023. The association says the power rationing measures in China shouldn’t deal too big of a blow to operations.

Voice of Joey Yen
International Data Corporation
Back in March and April, the supply and demand weren’t like now. Now, supply exceeds demand. And it’s just six days. So the impact will be just over a very short period. It seems that the effects won’t be as severe as during the lockdowns.

The analyst says the power rationing won’t have as much impact on Taiwanese firms as the Shanghai lockdown earlier in the year. Though both had an impact on supply chains, supply currently exceeds demand, meaning only rapidly selling laptop models could be affected.