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'China's Silicon Valley' Locked Down, Could Affect Supply Chains

SMIC Shenzhen
(Image credit: SMIC)

The Chinese government has acted decisively today to try and stem a Covid-19 outbreak in Shenzhen, a city of 17.5 million people that borders Hong Kong. The metropolis has now gone into total lockdown, which means people must work at home if they can; otherwise, all businesses must "suspend production." Shenzhen is a well-known tech and finance hub, and impacts on the former may send a shock through the IT industry supply chain.

Commodities analyst Eric Yeung shared the official notice from the Shenzhen Epidemic Prevention and Control Department. He also commented, "RIP US supply chain." The message says that essential organizations delivering medical, food, and fuel supplies may continue, but all non-essential businesses and services must close. The lockdown, started today, has a preliminary end date of March 20. However, the lockdown experience suggests the government can shift the date further into the month.

The Associated Press has more background on the lockdown and the period leading up to China's entire Shenzhen lockdown decision. It notes that 60 new cases of Covid were recorded in Shenzhen on Sunday, and this number was sufficient to nudge the government to implement a complete lockdown.

China will immediately start a testing program, and the AP reports this means all 17.5 million who live in the metropolis will undergo three rounds of testing. Of course, as well as ceasing business activities, people must stay put to avoid spreading the virus, so bus services and so on are suspended in the region.

Just 60 cases might sound quite a small number, but the government must tackle a virus with the potential for exponential spread with the greatest haste and care. For example, neighboring Hong Kong has recently succumbed to a significant wave of infections, with more than 32,000 cases diagnosed on Sunday, as well as 190 deaths. Compare that with the 60 cases in Shenzhen and 1,412 cases reportedly across the whole of China's mainland. And, let's be real, 60 officially reported cases likely isn't the same as 60 actual cases.

It isn't the first lockdown for the region and it doesn't look like it will be the last pandemic-caused lockdown of a vital tech hub in China, especially as the trigger number of infections seems to be relatively low.

We reported on an "emergency mode" lockdown covering Xi'an, China, in December. This area is home to two Samsung NAND fabs and essential semiconductor firms like Powertech Technology (PTI) and Micron Technology. Thankfully, there doesn't seem to have been much fallout from that lockdown. However, speaking of NAND, the WD/Kioxia Japan manufacturing process contamination accident appears to have had much more of an impact on supplies and, potentially, pricing.

Mark Tyson
Mark Tyson

Mark Tyson is a Freelance News Writer at Tom's Hardware US. He enjoys covering the full breadth of PC tech; from business and semiconductor design to products approaching the edge of reason.

  • Geef
    If I was there I'd be more concerned about China's normal response to cities with covid breakouts. :bounce:🔫
    Reply
  • peachpuff
    60 covid cases = city shutdown? Wtf is wrong with china?
    Reply
  • watzupken
    peachpuff said:
    60 covid cases = city shutdown? Wtf is wrong with china?
    Because in a densely populated country, 60 infected will easily get blown out of proportion. We’ve seen this happened in every country. It’s like when you see a rat in your home, you will want to get rid of it now or wait till your home is infested with rats before you take action?
    Reply
  • samopa
    peachpuff said:
    60 covid cases = city shutdown? Wtf is wrong with china?

    Not 60 Covid cases but 60 Covid reported cases. The actual cases can be much greater depend on political/social situation.
    Reply
  • peachpuff
    watzupken said:
    Because in a densely populated country, 60 infected will easily get blown out of proportion. We’ve seen this happened in every country. It’s like when you see a rat in your home, you will want to get rid of it now or wait till your home is infested with rats before you take action?
    That rat will keep coming back, it's been two years remember?
    Reply