China’s Xi’an lockdown has impacted several of the world’s largest semiconductor manufacturers

At least two of the world’s largest chipmakers have warned that Covid-19 outbreaks and stringent lockdown measures in a major Chinese industrial hub are jeopardizing the operations of their companies.

Xi’an, a city in China’s northwestern region that is currently experiencing one of the worst coronavirus pandemic outbreaks in the country, has forced Samsung and Micron to adjust their operations, the companies announced this week. Authorities have responded by enacting broad measures on a scale and with intensity that have not been seen since Wuhan, the pandemic’s initial epicenter, in response to the outbreak.

With any slowdown in manufacturing output, the global chip shortage, which has affected the supply of everything from iPhones to new cars, could become even worse.

Samsung announced on Wednesday that it was “temporarily” adjusting its operations in Xi’an, China. Protection of city workers remains a “top priority” for the South Korean conglomerate, which also stated that it intends to take “all necessary measures, including leveraging our global manufacturing network, to ensure that our customers are not impacted.”

Samsung has made a significant investment in Xi’an, where it employs more than 3,300 people and has invested more than $10 billion. According to the Korea Economic Daily, the city contributes to more than 40% of Samsung’s global output of NAND memory chips, which are used in devices such as smartphones, tablets, and hard drives. Samsung has a manufacturing facility in the city.

When CNN Business inquired about the impact of the strike on the city’s manufacturing, Samsung declined to comment.

Because of the company’s forced workforce reductions at the site, Micron, an American semiconductor company, said Wednesday that the lockdown in Xi’an could have an impact on the production of its DRAM memory chips, which are used in computers.

When it comes to meeting customer demand, Micron says it is utilizing its “global supply chain, which includes our subcontractor partners,” but it warns that “short-term delays may occur as we activate our network.”

New or more stringent restrictions affecting our Xi’an operations, according to the company, “may become increasingly difficult to mitigate.” According to the organization, team safety in the city is a “top priority,” and the organization is taking precautions ranging from physical separation to on-site testing in order to reduce the likelihood of virus transmission.

In the most recent outbreak, Xi’an, an ancient city in Shaanxi province, reported a total of 1,117 cases, the most of any city in the country. In the course of last week’s testing, it put the city’s 13 million residents on lockdown and closed down schools, public gathering places, and public transportation systems. Since Wuhan, when 11 million people were evacuated, this is the country’s largest lockdown.

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