Chinese Chip Maker Have Shanghai Workforce Sleeping In Factory Amid COVID-19 Lockdown
China's largest chip maker Semiconductor Manufacturing International Corp (SMIC) has more than 60% of its workforce in Shanghai sleeping in the factory as much of the city remains closed due to an extended COVID-19 lockdown.
According to the South China Morning Post (SCMP), the company's Zhangjiang complex has been operating in a "closed loop" arrangement, wherein workers have no direct contact with anyone from the outside world. This is being done in a bid to maintain production targets, showing how critical the industry leader is in China's aspirations of becoming independent of the U.S. in semiconductor manufacturing.
"The production is normal, with the capacity utilisation rate running at a higher level," an SMIC spokesperson told SCMP on Wednesday. The exact rate of utilisation was not specified.
The Shanghai government approved 666 companies to resume production as long as they could meet certain COVID-19 control requirements. SMIC was among those selected in this first batch, allowing it to have its staff back on site and resume operations.
There were about 60 semiconductor companies that received approval as part of the first batch, which reportedly includes Hua Hong Semiconductor, Shanghai GTA Semiconductor, ASML Shanghai and Advanced Micro-Fabrication Equipment Inc, among others. The selected companies, however, are part of the minority, given how there are more than 800 chip companies that operate in Shanghai.
The Chinese state-run newspaper Economic Daily reported that as of Sunday, only 70% of the total approved companies had resumed some level of production.
Despite this, logistics remain a problem for a lot of companies. With some cities in China yet to return to normal, such as the Shanghai's neighbouring Kunshan and Suzhou, problems with orders and shipments arise. Many foreign and domestic businesses in both the tech and automotive industry depend on these suppliers for semiconductors. Prolonged lockdowns could affect the global supply chain and extend the chip shortage problem.
China's largest chip maker SMIC has more than 60% of its workforce in Shanghai sleeping in the factory as much of the city remains closed due to an extended COVID-19 lockdown.
The company's Zhangjiang complex has been operating in a "closed loop" arrangement, wherein workers have no direct contact with anyone from the outside world.
SMIC was among the 666 companies that were approved by the Shanghai government to resume operations with the condition that they meet certain COVID-19 control requirements.