(Yicai Global) April 13 -- Integrated circuit companies in Shanghai, which accounts for a quarter of China’s chip output, are doing their best to keep the production lines rolling as the city enters its second week of lockdown due to a surge in Covid-19 cases and to meet growing market demand amid a global semiconductor shortage.

Over 600 employees at key posts in research and development as well as manufacturing have been staying at the plant since March 27, an executive at Shanghai Xinsheng Semiconductor Technology told Yicai Global. Normal operations can be guaranteed but we are a bit short of staff, he added.

Before the pandemic, it was usual for over 1,000 staff members to stay at the factory in the city’s Lingang New Area which operates 24 hours a day, he added.

“Our production lines run round the clock and staff work in two shifts,” Deputy General Manager Tan Zhaoguang said. It can be quite challenging if the machines are switched off as they may be damaged or require retesting and debugging, he added.

“Moreover, we can’t stop as the entire downstream supply chain will be affected should supplies be cut off,” said Tan, adding that demand for the company’s products is on the rise.

Shanghai is home to some of China’s biggest chip manufacturers such as Semiconductor Manufacturing International Corp. and Huahong Hongli Semiconductor Manufacturing. Last year its integrated circuit industry grew 20 percent from the year before to CNY250 billion (USD39.3 billion).

More than 6,000 employees are staying at Huahong’s five Shanghai plants to ensure production. The previous four shifts have been merged into two to make sure that a wide range of chips is available.

Logistics are a big problem, the Xinsheng exec said. Many chipmakers are based in the Yangtze River Delta economic hub, which comprises Shanghai and parts of Jiangsu, Zhejiang and Anhui provinces. But the movement of truck drivers into and out of Shanghai is being strictly controlled to prevent the spread of the virus between provinces. This has resulted in the delayed delivery of parts and components.

The Shanghai Municipal Commission of Economy and Informatization gave Xinsheng a pass to guarantee supplies in Shanghai. But inter-provincial transport takes more time.

Editors: Zhang Yushuo, Kim Taylor