Huawei, Xiaomi and key semiconductor manufacturers are keeping workers on the line despite contagion risks, according to reports out of China.
Reuters reports that “some Chinese technology firms” continue producing goods despite the government order to halt production. The idea is that work at factories is helping spread of the virus, so stopping the assembly lines will help slow down the microscopic critters.
The most important one is Huawei, which said today that it has resumed production of everything, from big industrial equipment to build 5G networks to appliances and phones. According to the company, which incidentally built the 5G communications at the new coronavirus special hospital in Wuhan — “operations are running normally“ thanks to a special permit to avoid the production ban issued by the Chinese authorities.
Semiconductor companies keep churning out chips of all kinds, from memory to CPUs. Among them, Yangtze Memory Technologies — which is based in Wuhan proper — and Semiconductor Manufacturing International Corporation. The former says that “production and operations at YMTC are proceeding normally and in an orderly manner,” noticing that it has implemented some ‘isolation and partition‘ measures to keep employees “safe”.
Affecting the supply line and even marketing
However, despite this special dispensation, the supply chain is still being affected by the virus.
Reputed analyst Ming-Chi Kuo has pointed out that Apple will see its production cut by 10% because of the virus outbreak. Last week, veteran industry analyst Patrick Moorhead said that coronavirus threatens iPhone 9 production and the entire electronics industry: “I can't imagine a scenario where the supply chain isn't disrupted.”
The Wuhan area is not only one of the biggest producers of iron and steel — it’s considered a ”crucial hub in the middle of China”, with the Yangtze river going across it, three railway stations and an airport. To give you an idea of its importance, 230 of the Fortune 500 companies have investments in this area. The Chinese government ban is also affecting other cities beyond Wuhan, as Reuters reports. And it seems it’s not getting any better, as the contagion and reported deaths keep spreading through continental China.
The virus is also affecting the Chinese companies‘ marketing operations. Beyond Apple and other companies closing shops across China, companies like Xiaomi and Blackshark — a manufacturer of specialized gaming phones — have cancelled their live press release events for the Xiaomi Mi 10 and the Blackshark 3. Instead, they will move these events into cyberspace following fears of the virus. But they will keep making the phones and selling them, of course.