A major high-tech industry center in China is ramping up testing after the Omicron variant of Covid-19 was detected. Tightened restrictions halted production in plants run by international companies like Bosch and Taiwan’s chipmaker UMC, putting further strain on supply chains.
Suzhou, a trading and industrial hub in the eastern province of Jiangsu, has reported 35 infections with confirmed symptoms in the new wave of COVID infections, a top city official said at the press conference on Feb. 16.
Given the Chinese regime is known to grossly underreport its virus numbers, the official number is likely not to reflect the true total.
The new infections are mostly linked to Suzhou Industrial Park, a key high-tech development zone that hosts about 100,000 companies and accommodates manufacturing facilities of foreign firms such as Samsung, Bosch, and Eli Lilly.
Local officials have labeled the park a risk area, and started mass screening on the early morning of Monday.
Experts have suggested the COVID containment measures in the Suzhou industrial park may send ripples across the global supply of semiconductors, which has already been at a crunch point after the pandemic-related disruptions in production.
One employee is “suspected of COVID-19 infection”, UMC said. Its unit operating the Suzhou plant, Hejian Technology, is required to take a company-wide PCR test, it noted.
Once the tests are completed and local authorities approved, operations will resume as soon as possible, according to the statement.
The suspension of the Suzhou plant will not impact the UMC’s first-quarter performance, read the statement. UMC said Hejian Technology contributed approximately 5 percent to its revenue.
However, some of Hejian’s clients, like China-based chipmaker Silergy Corp., said they were being hit by the temporary closure.
Tu Zhaojun, chief executive of a Taiwan-based chip company, said COVID containment measures in the park would impact wafer manufacturing, integrated circuits packaging and testing, or even the whole semiconductor supply chain.
“Given the chip supply falls short of the demand, the temporary closure of the plant, and the production suspension of the industrial park, due to the pandemic, will indeed have some effects on supply chains,” said Tu, whose firm does not have operations in the Suzhou park.
But the effects are yet unclear, Tu told The Epoch Times, saying the length of the suspension and the scale of lockdown remains to be seen.
As of Wednesday, two rounds of testing have been completed, and about 6,000 people were sent to centralized quarantine, said Yao Wenlei, deputy director of the park.
Automotive supplier Robert Bosch told Reuters that they expected a short-term impact on manufacturing and logistics operations in Suzhou. Local office staffers of Bosch were working from home, according to Reuters.
Tightened Control
Elsewhere in the city Suzhou officials have locked down affected buildings, urged people to stay at home, organized mass screening, and limited highway access under the regime’s zero-COVID strategy.On Wednesday, it closed 18 more highway entrances, after closing 15 a day earlier. Anyone leaving the city would have to present proof of negative test results within 48 hours.
To prevent the flare-up from spilling into other cities, Suzhou suspended subways and bus services to its neighboring city of Shanghai.
Wu Zhenglong, the Chinese Communist Party chief of Jiangsu Province, demanded all departments to “improve their political awareness” and “made every effort” in combating the virus.
