Shenzhen COVID Spike expected to cause global tech shortage
Global tech supply chains grind to a halt
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Shenzhen, often referred to as ‘the Silicon Valley of China’, is home to the largest hardware manufacturing industry in the world and looks set to grind to a halt as Shenzhen COVID levels reach their highest number in two years. Around 17.5m residents have been locked down, this will cause massive delays in the production of pretty much anything related to hardware as an estimated 90% of the world’s electronics are manufactured here. This includes everything from mobile phones to TVs, to CPUs, GPUs, and of course, PC gaming peripherals.
From humble fishing village, to China’s Silicon Valley
Just three decades ago, Shenzhen was little more than a humble fishing village near the southeast coast of China, peeking over at the ominous skyline of the economic powerhouse, Hong Kong. In the years since, Shenzhen has experienced rapid growth, both economically, and technologically. The main export changed from fish to technology, this shift in economy was spearheaded by the designation of Shenzhen as a ‘Special Economic Zone’. Among other things, this allowed special privileges to Shenzhen, mostly created to attract foreign investment, for example, promises of business autonomy and some choice implementation of taxation.
This explosive growth caused the vista of Shenzhen to go from tranquil hills and rural fields of crops to a skyline of glass and concrete, interspersed with cavernous warehouses housing some of the most efficient and technologically advanced production lines in the world. In just thirty years, the entire area has become a global technology hub that influences quite literally every aspect of tech, gaming, and computing. If you own a keyboard, mouse, or controller, chances are very high that some or all of it was manufactured in the once humble region of Shenzhen
COVID-19 surge causes PC hardware shortages… again
Earlier today veteran gaming peripheral company Pulsar tweeted about how the Shenzhen COVID spike has affected their production. They stated that parts for several of their products, including gaming mice, and mouse feet upgrade packs are stuck in port and not able to move.
With China’s strikingly definitive COVID-19 measures now locking down essentially the entire city, many tech hardware companies will face huge shortages, with the PC gaming sector being hit particularly hard. One of the largest manufacturers in the world, Foxconn has its super-factory in Shenzhen and it’s been completely locked down. Foxconn is known primarily for its role in building Apple’s iPhones, but it also manufactures motherboards for intel, PCBs for keyboards, and myriad other components used in tech and gaming hardware.
The GPU shortage was looking like it was coming to an end, with gamers breathing a collective and tentative sigh of relief. Unfortunately, it now appears that we are likely back to square one as the Shenzen COVID spike will no doubt have huge knock-on effects on the gaming and tech supply lines.
It’s unclear as of yet how long global supplies of peripheral and other hardware will be affected by the Shenzhen COVID surge, but given Shenzhen’s influence over the global tech supply chain, it could cause a ripple effect that will continue to slow things down for years to come, as we saw with the GPU shortage of last year.
