Rationing of industrial power consumption in Southwest China's Sichuan province, a key manufacturing location for the semiconductor and solar panel industries, will have short-term and limited impact on local industries, said corporate representatives and analysts.

Sichuan, which is also a lithium hub in the country, has rationed electricity supply to factories in the past few days as a heat wave sent power demand soaring and dried up reservoirs, which has worsened the situation as the region relies on dams to generate 80 percent of its electricity.

Several electronics, semiconductor and solar panel manufacturers in Southwest China said they have either suspended operations or curbed production so far but said the impact is not big at present.

While makers of solar power equipment in Sichuan, including leading solar manufacturers Tongwei Solar Co Ltd and GCL-Poly Energy Holdings Ltd, said they received notices to ration power, Jinko Solar Co and Beijing Jingyuntong Technology Co are shutting down factories.

Jiang Yali, a solar analyst at BloombergNEF, said he believes this might to some extent worsen the temporary undersupply of the key solar PV material polysilicon and cause a global supply chain bottleneck.

Tongwei produces 110,000 metric tons of solar-grade silicon annually in Sichuan. Restarting production may require at least two weeks, so the shutdown could cut supply by 4,000-5,000 tons, or 7 percent of August production, according to BloomberNEF.

GCL-Poly also has a plant in Leshan but it has not started full production. Sichuan also produces 28 gigawatts of ingots and 47 GW of cells a year, but these are not bottlenecks in the solar supply chain and these factories can be quickly restarted, it said.

Polysilicon spot prices surged to $39.20 a kilogram in the week beginning Aug 8, the highest since October 2011, even before this announcement.

BloombergNEF said it expects prices to ease in the fourth quarter.

Tongwei said the power cut and production shutdown have not had much impact and the company's power consumption will return to normal levels once the power shortage eases.

Chinese display panel manufacturer BOE Technology Group Co Ltd said in a stock market filing late on Tuesday that the power supply restriction will not have a "major impact" on the company's overall operating performance.

The electronic information industry serves as the largest pillar industry in Sichuan, as the industrial chains related to personal computers, telecommunication equipment, chips and other electronic hardware equipment contribute more than half of the province's total revenue.

BOE said it will "make adjustments" at its operations in Sichuan due to power rationing in the region and will maintain communication with local authorities.

The company has four semiconductor display production lines in Chengdu and Mianyang, including two lines producing liquid crystal display screens and two making flexible active-matrix organic light-emitting diode screens.

Financial news outlet Cailian Press reported Foxconn Technology Group, the world's largest contract electronics manufacturer and a key supplier to Apple Inc, has suspended production at its plant in Chengdu.

Foxconn declined to disclose the status of its Chengdu plant operations but said the impact of the power crunch was "not big".

Official data showed the revenue of the electronic information industry in Sichuan came in at 1.46 trillion yuan ($215.3 billion) in 2021, taking the top spot in central and western regions.

Li Xianjun, an associate researcher at the Institute of Industrial Economics, which is part of the Chinese Academy of Social Sciences, said the impact of power cuts on the high-tech manufacturing industry segment is "limited and temporary", as demand for PCs, display panels and chips has witnessed a decline in recent months, and current inventory can meet consumer demand.

Xin Baoan, chairman of State Grid Corp of China, said the company will give full play to the role of large power grids in allocating resources and transmit more power to Sichuan to support power supply in Sichuan and Chongqing to the maximum extent.