Some Apple suppliers are offline amid China's energy crisis

What you need to know

  • Some Apple suppliers have been forced to stop production amid an energy crisis in China.
  • Eson Precision Engineering, an affiliate of Foxconn, has paused production for almost a week.
  • Energy costs are rising in the country amid a crackdown on consumption.

It isn't clear the impact it will have on Apple.

Some of Apple's suppliers are currently shutting down manufacturing operations amid a Chinese energy crisis that has seen prices increase and the government initiate a crackdown on consumption. This comes just days after Apple put the best iPhone ever on sale and needs its supply chain running as smoothly as possible.

According to a new Nikkei report, one of Apple's suppliers has stopped production and won't come back online until the end of the week.

Eson Precision Engineering, an affiliate of Foxconn -- the world's biggest iPhone assembler -- and a key mechanical parts supplier for Apple and Tesla, on Sunday said it suspended its production from Sunday until Friday at its facilities in the Chinese city of Kunshan in direct response to the city's policy of stopping electricity supply for industrial use.

Another supplier, Unimicron Technology, has stopped production in two cities until the end of the month. It plans to increase capacity at other plants to try and compensate for the downturn in production.

Unimicron Technology, a major print circuit-board maker and key Apple supplier, said its subsidiaries in the Chinese cities of Suzhou and Kunshan in Jiangsu Province also needed to stop production from Sunday noon till the end of the month. The Taiwanese company said it would mobilize production capacity in its other manufacturing sites to mitigate the impact, according to its stock-exchange filing on Sunday.

However, Pegatron, a hugely important iPhone assembler, says that it has not been affected by the recent moves.

The issue stems from increasing gas and coal prices, with the government keen to also reduce the amount of energy that is being used, according to the report.

China's crackdown on energy consumption comes from a combination of reasons -- surging coal and natural gas prices, as well as Beijing's effort to cut emissions and an increase in energy demand -- and is impacting a wide range of industries. It comes at a time when global markets have been shaken by the debt crisis engulfing China Evergrande Group, one of the country's leading property developers.

It isn't immediately clear whether any of this will have a direct impact on APple\s manufacturing plans. The company recently released the new iPhone 13 lineup while new iPad and iPad mini tablets were also introduced. The upcoming Apple Watch Series 7 launch is also set to take place within the next few weeks, too.

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