China’s Power Crunch Threatens More Global Supply Chain Chaos

News and Noteworthy

The power supply shortage in China is impacting chip production.

A growing power supply crunch in China is triggering blackouts for households and forcing factories to cut production, threatening to slow the country’s vast economy and place even more strain on global supply chains.

Companies in the country’s industrial heartlands have been told to limit their energy consumption in order to reduce demand for power, state media has reported. And supply has been cut to some homes, reportedly even trapping people in elevators.

An “unexpected and unprecedented” power cut hit three northeastern provinces on Monday, according to the Global Times, a state-run tabloid. The newspaper reported Tuesday that power rationing in Heilongjiang, Jilin and Liaoning provinces has “resulted in major disruptions to the daily lives of people and business operations.”

Power shortages have also hit the southern province of Guangdong, a major industrial and shipping hub. Local officials said Monday that many firms are trying to reduce demand by working two or three days per week.

Major international suppliers are bracing for impact on businesses already confronting delays caused by shortages and global shipping delays.

Power rationing could create new headaches for the tech supply chain, although likely not as severe as the worldwide shortage of computer chips that has hammered everything from cars and washing machines to other electronics.