Apple, Tesla Suppliers Among Companies Needing To 'Make Adjustments' As Heatwave In China Hits Production

After a record-setting heatwave in the Chinese lithium hub Sichuan province, authorities are rationing electricity supply to factories until Saturday, forcing major production giants to either halt production or "make adjustments."

Chinese state media reported that due to the heatwave, the temperatures in the province hovered above 40-42 degrees celsius (104-108 degrees Fahrenheit) in the past week, sending power demands soaring and increasing the demand for air conditioning.

The electricity rationing has affected the production of many tech giants, including Apple Inc's AAPL supplier BOE Technology Group Co Ltd. The company said it would "make adjustments" to its operations in Sichuan due to low supply in the region.

In a stock market filing on Tuesday, the company said it was communicating with authorities and expected "no major impact on its overall operating performance." BOE Technology supplies small volumes of displays for iPhone 13 devices and older models. It could also potentially supply displays for the upcoming iPhone 14, according to reports from Apple analyst Ming-Chi Kuo, Reuters reported.

However, Apple supplier Hon Hai Precision Industry Co Ltd's HNHPF — better known as Foxconn — a spokesperson told Reuters that the impact of the power crunch was "not big."

Other than Apple suppliers, CATL, the world's largest battery maker that counts Tesla Inc. TSLA among its key customers, also said it would stop production at its Yibin plants from Aug. 15 to Aug. 20 due to the power cuts. Japanese media outlet Kyodo also reported on Tuesday that multinational automotive manufacturer Toyota Motor Corp TOYOF had also suspended production at its plant in Sichuan.

An email sent to Toyota by Benzinga seeking comments didn't elicit any response as of press time.