Shanghai lockdown could affect Taiwan firms' shipments

TAIPEI, March 28 (Bernama) --  A lockdown to contain a surging COVID-19 outbreak in Shanghai, where many Taiwanese companies have operations, could have an impact on those firms' shipments, Taiwan’s Economic Affairs Wang Mei-hua Minister said on Monday.

Central News Agency (CNA) reported Wang told reporters on the sidelines of a hearing at the Legislative Yuan, that the ministry's Industrial Development Bureau had spoken with Taiwanese investors in Shanghai to get a better understanding of the impact from the lockdown.

Wang said that their current operations had not been adversely affected yet, but there are concerns that their shipments will be affected to some extent.

Amid fears that stringent restrictions on the movement of people in Shanghai will hurt global trade and take a toll on the world's economy, Shanghai authorities on Sunday introduced a phased lockdown with citywide testing to get underway after the city reported a new high of about 3,500 infections that day.

In the first phase, the lockdown and testing will begin on Monday and last until April 1 for areas east of the Huangpu River, or Pudong, followed by the second phase in which areas west of the river, or Puxi, will then undergo restrictions and testing from April 1 through April 5.

Under the restrictions, public transportation will be suspended with unapproved vehicles not being allowed on the roads, and non-essential businesses will be closed, while residents will be required to stay home during the lockdown.

CNA also reported that Taiwan’s Materials Analysis Technology Inc., which runs a lab for a wide range of testing such as material analysis, reliability analysis, and failure analysis, said deliveries from its Shanghai subsidiary would be postponed until the end of the phased lockdown in the city.

To make up for the delayed deliveries, Materials Analysis Technology will reallocate its global production, while the company will keep in close contact with its clients and suppliers regarding the lockdown, it added.

The company also said it had adopted necessary measures to ensure its employees' health and safety in Shanghai.

In addition, silicon wafer supplier Wafer Works Corp. said it expected its shipments to be affected by the lockdown, while production remained normal at its Shanghai site.

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, said the lockdown was unlikely to affect production in its wafer fab in Shanghai, adding the company will follow the city's COVID-19 prevention guidelines.

TSMC runs an eight-inch wafer fab in Shanghai's Songjiang district.

ASE Technology Holding Co., the world's largest integrated circuit packaging and testing services provider, said the restrictions on movement in Shanghai were expected to raise the logistics costs of the company's subsidiary USI, while the unit will also spend more to take care of its employees in the city amid growing COVID-19 cases.

ASE said the subsidiary would abide by the rules imposed by the health authorities in Shanghai, but expected this to have a limited impact on its sales, CNA reported.

USI operates several plants in the Zhangjiang Hi-Tech Park in Pudong to provide tailored systematic production solutions for smart wearable device suppliers.

-- BERNAMA