From Nikkei Asia, January 2:
China's tech supply chain is heading into the new year facing the twin challenges of slumping demand and staffing chaos caused by Beijing's abrupt U-turn on COVID controls.
In a sign of the gloomy outlook for consumer electronics, Apple has notified several suppliers to build fewer components for AirPods, the Apple Watch and MacBooks for the first quarter, citing weakening demand, according to Nikkei Asia's supply chain checks with several component suppliers."Apple has alerted us to lower orders for almost all product lines actually since the quarter ending December, partly because the demand is not that strong," a manager at an Apple supplier told Nikkei Asia. "The supply chain in China is still trying to cope with the latest abrupt policy turns, which brought a shortage of laborers because of the sharp COVID surges."
That policy change came in early December when China started to dismantle the world's most stringent COVID regime, which included mass testing and quarantines, to kick-start the flagging economy.
Tech manufacturers initially welcomed the turnaround after years of fighting to maintain operations under the strict COVID measures. But now they face the challenge of embracing a new normal of rising infections and looser controls.
"It's very chaotic," an executive at an electronic component maker that supplies Samsung, Apple and several Chinese smartphone makers told Nikkei Asia. "The new wave of COVID surges spread super fast, and most companies found it already makes no sense to quarantine their employees."An employee at smartphone maker Honor described how workers now are largely resigned to catching the virus....
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The lockdowns were never about the disease.
