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Taiwanese businesses expect NT$10 billion in losses during Kunshan power cut

Kunshan authorities ordered suspension of industry, business, and trade until Sept. 30

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Factory production has been suspended across China under the "dual-control" plan.

Factory production has been suspended across China under the "dual-control" plan. (CNA photo)

TAIPEI (Taiwan News) — After the Chinese city of Kunshan required local businesses and factories to suspend production from Sunday (Sept. 26) until Thursday (Sept. 30), Taiwanese businesses in the city were estimated to suffer at least NT$10 billion (US$361.22 million) in losses.

The power crunch has affected major industries, including the Apple supply chain, electronic manufacturing services (EMS), optoelectronics, and electronic component manufacturing, UDN reported. Major Taiwanese businesses such as AU Optronics, Concraft, and EMC would have to rely on stock to fulfill orders during the suspension of production.

In an interview with UDN, Kunshan Taiwanese Business Association President Tsung Hsu-hui (宗緒惠) said many “inessential” manufacturing businesses of all scales had received notice to pause production from around Saturday evening (Sept. 25) to noon on Sunday. Some Taiwanese business personnel were frantic, while others were understanding and cooperative, said Tsung.

Many factory employees had celebrated companies’ decision to extend the Chinese National Day holiday, which usually begins on Oct. 1 and lasts for several days, ETToday reported. However, executives of manufacturing companies feared that the break would further delay turnaround times.

ETToday cited an executive as saying people are most worried about what comes after the holiday, for if the power crunch does not get better or even worsens afterward, it would be difficult to assess the level of impact on businesses.

According to the 21st Century Business Herald, the power crunch and production suspension stem from two factors: the shortage of coal supplies, leading to high electricity costs, and regional control of energy consumption under the pressure to abide by the “dual-control” plan to curb energy consumption and intensity.

“With the goals of carbon peaking and carbon neutrality, this wave of power cuts and halted production highlight the importance of managing the relationship between mid- and long-term green transition and steady short-term economic growth,” said the 21st Century Business Herald.