A heat wave affecting the province of Sichuan, in China, shut down several important factories for the automotive industry or that of solar panels.
It’s not just covid-19 that can shut down strategic production sites. We remember, for example, the floods that occurred in Thailand in 2011, which undermined the hard drive industry. Today, an intense heat wave affecting the Chinese region of Sichuan is forcing large companies to announce the closure of their production lines for a few days.
Indeed, this heat wave causes difficulties in the production of electricity. A shortage of energy which forces companies like Intel or CATL, the world’s largest manufacturer of batteries for electric vehicles, to close the doors of their production sites for six days, while this heat wave passes. The suppliers affected work for the groups Foxconn, Volkswagen, Tesla, Texas Instruments or even Toyota, specifies CNN.
If these factories are closing, it is because they had no choice. The government has indeed asked all production units in Sichuan to pause their activities until August 20 to reduce energy demand. The temperatures observed, which are the highest recorded in 60 years in the region and which exceed 40°C in several cities, lead to a massive use of air conditioning, while the electricity production capacity is altered. You should know that, in this region, a good part of the electricity is supplied by hydraulic power stations, which are dependent on reservoirs whose levels are abnormally low.
Photovoltaic industry affected
As CNN explains, this region is particularly important globally for the production of semiconductors and solar panels, as well as for the extraction of lithium used in car batteries and electronic devices. It only took a few hours for these factories to close for the wholesale prices of polysilicon (the basic material for photovoltaic panels) to increase.
Some large groups wanted to relativize the impact of this climatic event on their productions. Apple, for which Foxconn manufactures iPads in these factories, says it does not expect strong consequences. Ditto for Volkswagen, whose production of electric vehicles is nevertheless partly dependent on components manufactured in the province of Sichuan.