The Big Picture, by Graham Burgess

Power Outages hit LED production in China

Every year, on October 1st, China celebrates National Day. This is the first day of a week of holidays, sometimes known as Golden Week (Japan also has a Golden Week holiday, but the two are not connected and celebrate different events).

As factories return to work, some today October 7th, but most tomorrow October 8th, more interruptions can be expected. The UK is not the only country with energy issues (which suggests this is not connected to Brexit), problems with power are sweeping across the World.

China has now introduced a “Dual Control of Energy Consumption” policy that will affect manufacturing generally and specifically Shenzhen, Fujian and other major manufacturing hubs. Between now and March 2022, factories are required to adjust their manufacturing schedule to 7 days on and 7 days off, or work for 3 days and close down for 4 days.

This will cause an additional delay in the supply of China manufactured goods and, given the preponderance of LED manufacturers there, in Shenzhen in particular.

With the shortage of semiconductors, the price increase for most raw materials and, consequently, finished goods, coupled with delays in shipping due to Chinese New Year next February I’d say we are in for a rough few months ahead.

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