US car chip maker Onsemi the latest to warn of Shanghai disruptions as supply chains remain strained
- A letter that appears to be from US chip maker Onsemi says its Shanghai distribution centre, one of four in Asia, has no date to resume operations
- The firm’s customers include suppliers to major carmakers like Ford and Audi, but its Chinese manufacturing facilities are located in other cities
US-based auto chip maker On Semiconductor Co (Onsemi) has reportedly shut down operations at its Shanghai distribution centre, one of four that it operates in Asia, as lockdowns in China’s financial capital continue to reverberate through the supply chain and affect global customers.
The Nasdaq-listed firm, whose customers include major suppliers to carmakers like Audi, General Motors and Ford Motor, also warned that increasing restrictions in smaller cities throughout China could affect the operations of its suppliers of materials, equipment and services across the country, according to a letter signed by Onsemi vice-president of sales Mike Balow circulating on Chinese social media.
“At this time, there is no change to our status,” the letter, dated April 18, reads. The company has not been notified of when restrictions may be lifted, according to the letter, and it has begun transferring resources to its distribution centres in Singapore and Manila. It also has a centre in Narita, Japan, which is not mentioned in the letter.
Onsemi does not operate any manufacturing facilities in Shanghai, but the letter warns of impacts to operations from lockdowns in Shenzhen, Suzhou, in Jiangsu province, and Leshan, in Sichuan province, where it does operate such facilities.
Calls to Onsemi’s Shanghai office on Wednesday went unanswered, and the company did not immediately respond to requests for comment via email.
“Today’s global supply chains are under unprecedented attack,” said Jennifer Bisceglie, founder and CEO of Interos, a supply chain risk management firm. “From Covid and cyberterrorism to Putin and China’s recent lockdown of Shanghai, we’re seeing a global economy that’s been invaded by bad actors and hamstrung by extremely difficult public health and security concerns.”
Technology supply chains have been especially hard hit by Shanghai’s citywide lockdown imposed in late March, which upended daily life in the metropolis as it tries to deal with China’s worst Covid-19 outbreak in two years. In addition to being a major semiconductor hub, Shanghai is an important location for the automotive and pharmaceutical industries.