The Big Picture: Part 2, Geopolitics and the PCB Supply Chain

Since my last column on this topic was so popular, I figured I should double down on it. If you’ve been living under a rock, let me tell you, stay there! China is currently undergoing a spate of power issues due to a perfect storm of trade feuds, electricity price capping, insane coal prices, and high consumer demand. Hold on to your mast because this one’s going to be a wild ride.

China has improved by leaps and bounds over the last 50 years to increase its infrastructure to cater to a global export economy. I remember going to Shenzhen in the early ’90’s when it was still predominantly rice paddies and “‘small”’ villages. Three decades later and it has become one of the most technologically advanced and bustling cities in the world. That also goes for most of the rest of eastern China. As you may well know, during one of the greatest migrations of the 20th century, millions of rural farmers migrated to the up-and-coming coastal cities, creating some of the most urban dense real estate on the planet.

Unfortunately for China, and consequently the rest of us, it doesn’t matter how advanced your cities are if you can’t power them. Their growth in modernization and population has outgrown the pace at which infrastructure and manufacturing can keep up. Just this past week, over 19 provinces across China experienced state mandated power cuts. Hotels, households, small businesses, and even factories and shipping ports are being forced to turn their power off. Most notably, Taiwanese-run factories supplying Apple and Tesla have ceased operations. The Chinese authorities are forcing millions across the country to curb their usage, turning them to alternative energy sources such as diesel generators, while coal plants shutter under New York-style rent control pricing, effectively prohibiting their ability to function in any sense of the word "capital." It’s become so bad that people can’t run their dishwashers and elevators are being closed to conserve power.

Xi Jinping and the ruling party have pinned this crippling issue on 21st century self-imposed carbon emission mandates, and while China seems to be taking strides toward meeting those, I have a hard time believing China would cut its arm off while trying to feed itself during a famine. In all actuality, China’s power output has increased by 10% year over year to meet increased demand, but they still can’t keep up. Chinese nationals are buying home goods and electronics at a pace never seen before, and with the rising demand for aluminum, cement, and steel (the most energy intensive products in China), you’ve got yourself the perfect storm.

Most of the blame falls on rising coal prices, as they surge amidst high electricity demand and reduced output with an ongoing trade dispute between China and Australia. Ever since their petition to commission an official investigation into COVID-19, Australia has had quite the relationship with the ruling party. Being the number two global exporter of coal, combined with China’s local coal mines experiencing down times due to new safety mandates, the price of coal futures has doubled.

A coal mine near Hailar District, Inner Mongolia, 2005. (Source: Creative Commons)

Currently, outside of China’s largest ports sit over 242 container ships, waiting to be stacked with cargo bound for Western shores. While container shortages and shipping shortages have plagued exports in the past, these factors have further been confounded by the power cuts, which have reduced the ability of dock workers to load and stock ships at their usual 24/7 pace. Of course, we all know this means an increase in shipping prices. What used to be $1,200 to $1,500 per (40-foot equivalent unit) FEU today fetches $20,000 a pop.


Cargo ship positions as of October 6, 2021; dots indicate at anchor. (Source:

Shift over to the West and it’s not much better. L.A. and Long Beach have over 70 ships offshore waiting to be offloaded, workers hindered by myriad of problems, most notably a lack of delivery trucks and freight trains—we just can’t seem to hire enough people. I have my own views on our government paying for people to sit at home, but that topic can wait for another day.


Cargo ship positions as of October 6, 2021; dots indicate at anchor. (Source:

Which brings me full circle in this column. Adding to the other supply chain issues stemming from China already straining our industry, if you can’t produce the power required to run the ports to transport your goods and ease shipping backlogs and factories that are being closed due to power shortages, then you’ve found yourself up a creek without a paddle.

Hopefully China gets its power situation figured out sooner than later, because we’re sure to be feeling it where it truly hurts in the months to come.  

Mehul J. Davé is CEO and chairman of Entelechy Global Inc. and chairman of Linkage Technologies Inc.



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