China declares lockdown in manufacturing tech hub Shenzhen

Supply chain issues could worsen further amid Russia’s invasion of Ukraine

China has declared a lockdown in the city of Shenzhen, a major tech hub which is home to Huawei's Chinese headquarters and Apple supplier Foxconn.

Shenzhen went into total lockdown on Sunday after 60 new Covid-19 cases were reported in the city, meaning that all non-essential workers must remain at home though some essential services like healthcare and food will be able to continue.

The city borders Hong Kong - which is tackling a fresh wave of Covid-19 and reported more than 32,000 cases on Sunday.

The lockdown is expected to conclude on 20 March, though may carry on longer, which could further add to global supply challenges amid existing semiconductor shortages and Russia's recent invasion of Ukraine.

Analysts had already predicted that supply chain problems would worsen following Russia's invasion. CONTEXT said it would "cause shockwaves" around the IT channel given the two countries' importance in producing some key materials and because of travel restrictions.

According to a report from Bloomberg, Foxconn - the primary Chinese manufacturer of the iPhone and other Apple products - announced on Sunday that it was suspending operations in Shenzhen in response to the government-imposed lockdown on the city.

This latest disruption comes at a particularly difficult time for manufacturing companies, which are already dealing with increased raw material and transportation costs, as well as longer delivery delays and labour shortages.

Governments and global corporations have been attempting to tackle the problems of late, with US president Joe Biden announcing a new plan to "revitalise" American manufacturing while Intel has announced plans for two new chip plants in Ohio as it looks to lessen the dependency on Asian manufacturing.