China’s Sichuan province has ordered all factories to shut down for six days to ease a power shortage in the region as a scorching heat wave sweeps across the country, CNN Business accounts.
Sichuan is a key manufacturing location for the semiconductor and solar panel industries and the power rationing will hit factories belonging to some of the world’s biggest electronics companies, including Apple (AAPL) supplier Foxconn and Intel (INTC).
The province is also China’s lithium mining hub — a key component of electric car batteries — and the shutdown may push up the cost of the raw material, analysts said.
China is facing its fiercest heat wave in six decades, with temperatures crossing 40 degrees Celsius (104 degrees Fahrenheit) in dozens of cities. The extreme heat has caused a spike in demand for air conditioning in offices and homes, putting pressure on the power grid. The drought has also depleted river water levels, reducing the amount of electricity produced at hydropower plants.
Sichuan, one of China’s largest provinces with 84 million people, told 19 out of 21 cities in the region to suspend production at all factories from Monday to Saturday, according to an “urgent notice” issued on Sunday by the provincial government and the state grid.
The decision was made to ensure that enough power is available for residential use, the notice said.
The southwestern province — which is also a key hydropower hub in China — has been gripped by extreme heat and drought since July. Since August 7, the heat wave in the province has intensified to “the most extreme level in six decades,” and average rainfall has dropped by 51% from the same period in previous years, according to an article posted on the government’s website on Tuesday.
The province’s top officials warned Monday that Sichuan is currently facing the “most severe and extreme moment” in power supply, according to the government-run Sichuan Daily.
Luzhou, a city in Sichuan, announced last week that it would shut off the city’s street lights during the night to conserve power and alleviate the pressure on the electricity grid.
Written by Adekunle Biodun