Sichuan Province, where semiconductor factories are concentrated
Extension of measures to suspend power transmission to the Corporation
Disruption in the supply of electric vehicle parts
City lights out for two days in Shanghai
The government of Sichuan Province in China has decided to extend the cessation of power supply to industrial complexes where factories are densely located until the 25th. In Sichuan Province, factories such as Toyota, Apple, and Tesla are concentrated. If the shutdown period of these factories is prolonged, the entire global supply chain will inevitably suffer.
Sichuan Province announced on the 22nd that it had decided to extend the suspension of operations from the 15th to the 20th for six days until the 25th due to the power shortage.
China is experiencing a power crisis due to a record heat wave this summer. Electricity consumption soared as the highest temperature ever recorded in more than 200 locations across the country. According to Bloomberg, an official from Sichuan Province said in a briefing on the 19th that Sichuan Province’s peak electricity demand recently surged to 65GWh (gigawatt-hour), up 25% compared to the same period last year. On the other hand, water inflows for hydroelectric power generation have been cut in half, the official added.
During the shutdown period, Sichuan Province stopped all industrial facilities in the province, implemented a planned power outage, and kept the lighting of essential facilities such as subways lower than usual. Accordingly, more than 16,000 manufacturers in 19 cities in Sichuan Province will have to continue the suspension of operations that started on the 15th until the 25th.
Sichuan, with a population of 84 million, is also a key manufacturing region for the global semiconductor and solar panel industries. The CATL plant, the world’s No. 1 battery maker, is also located in Chengdu, Sichuan Province. Caixin, a Chinese economic media outlet, was concerned that if the power shortage in Sichuan is not resolved early, it could lead to disruptions in the electric vehicle battery and solar panel industries as well as the electric vehicle industry as a whole.
The city of Shanghai was also affected by the suspension of operations in Sichuan Province. As parts such as batteries and semiconductors were not supplied properly, the operation of Tesla factories in Shanghai was also disrupted. On the 16th, the city of Shanghai asked Sichuan Province to “prioritize the restart of Tesla and Shanghai automobile-related factories.” As this fact became known, criticisms arose among Sichuan residents, saying, “Sichuan already lacks electricity for daily living, what are you talking about?” and “Is the night view of the Shanghai Bund clean?”
In the end, the city of Shanghai also announced on the 21st that it had decided to suspend the night view of the downtown area around the Bund, a famous tourist attraction in Shanghai, for two days from the 22nd due to a power shortage. The city government explained that this measure is in accordance with the 2022 Shanghai Electricity Supply Plan announced in June.
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