COVID cases in Kunshan, Jiangsu, a town consisting of several Taiwanese-funded manufacturing plants, have continued to rise rapidly. As such, on the evening of the 12 th , Kunshan announced that from midnight of the 13 th , the entire Kunshan area will be divided into "four zones". These include a closely controlled zone, a controlled zone, a static management zone, and an epidemic-free zone. Amongst these, the Kunshan Development Zone, the entire Hua-qiao Economic Development Zone, the Kunshan High-tech Zone, and parts of Lujia Township, will be designated as a "static management zone" from midnight on April 12 th to midnight on the 19th.

  Kunshan is not only a Taiwanese business hub, but it is also an important area in the PCB industry. According to data from the public information observatory, from the 11 th , nearly 80 Taiwanese businesses had to suspend work due to these local epidemic prevention measures in Kunshan. According to the industry, it is currently a traditional off-season for the trade, so there is about half a month's worth of stock in the factory ready for production and shipment, but manufacturers have already started to monitor the follow-up situation as well as dynamically dispatched resources from other factories to support production operations. Therefore, short-term closure and shut-downs won’t have too much of an impact on their operations Nonetheless, since the neighboring city of Shanghai is the hardest hit area in ​​this wave, and there is still sign of the pandemic slowing, if the period of static management is extended, the situation will inevitably affect the decision-making of the local Kunshan government. Besides, even if the lockdown is lifted as scheduled, measures will not be relaxed too much as it is believed that economic activities and the movement of personnel will still be restricted in the short term.

  This scenario is not just happening in Kunshan — the highly-contagious Omicron variant has already spread to many other provinces in China. Although most patients only experience mild symptoms, local governments from several areas are still implementing strict prevention and control measures, officially described as “dynamic clearing”, in the mainland. This is not conducive for Taiwanese businesses in particular, as almost 60% of Taiwan's PCB industry is based in mainland China, with most of these concentrated in eastern and southern China, the areas most hard hit by the pandemic. As viewed, the impact on the industry is no less stringent and harsh than the “power outage” adopted at the end of last September.

  In addition, the shut-down measures have not only impacted the production of manufacturers directly but also started to affect freight logistics. Based on the round-table forum of the European Union Chamber of Commerce in China held in early April, production activities of some large, foreign-funded enterprises are still sustainable, but goods circulation in mainland China, as well as cross-border transportation and the movement of personnel, are common issues foreign-funded enterprises are confronting at this stage. This will negatively affect the global supply chain capacity of electronic components, and may eventually exacerbate global inflation.