Data I/O Provides Update on Operations Amid Covid-19 Outbreaks in China

Data I/O Corp. provided an update on operations relating to the Russia invasion of Ukraine and the recent Covid-19 (or coronavirus) outbreaks in China.

The commentary that follows is attributable to Anthony Ambrose, president and CEO: “The company operates in China through a wholly-owned subsidiary, with manufacturing, administration, service and sales operations located in the city of Shanghai.“

“According to published reports, outbreaks of the Omicron variant of Covid-19 in China led to a record-breaking level of new local Covid-19 cases that have so far this year exceeded the cases recorded in 2021. In recent weeks, new Covid cases have been reported in Beijing and Shanghai, as well as in the provinces of Guangdong, Jiangsu, Shandong and Zhejiang. In response, the Shanghai government announced further restrictions on operations that are expected to shut down our facility from March 29 through April 5. With the prior Covid restrictions and now the shutdown, revenue shipments of approximately $1 million are held up and delayed until the second quarter. Most of our Shanghai employees are working remotely providing technical support to our customers.“

“Our operations in China have remained open since the onset of the Covid-19 pandemic approximately 2 years ago. We maintain remote working procedures for non-manufacturing and non-factory floor personnel in China. This does not, however, remove our responsibilities from operating safe workplaces, protecting our team members and communities, and abiding by local regulations. As such, some of our team members in China have been unable to report to work due to quarantine and travel restrictions. In addition, some key customers and supply chain partners are experiencing similar workplace challenges and are unable to deliver parts and equipment to us or accept our products that have been manufactured. The primary issue we are presently encountering in China is the quarantining and temporary closure or lockdowns of certain technology zones where our customers are located, as well as logistics issues due to freight forwarders’ inability to pick up systems. This will in turn impact our revenue recognition, inventory and other financial performance measures. We have not received any requests to cancel orders to date and expect to deliver finished systems and other products as soon as the limitations are lifted. If required, we can move production to our Redmond facility; but we do not anticipate this will be required for these shipments.“

“Due to the invasion of Ukraine, economic and trade restrictions have been imposed against Russia. Data I/O has no operations in Ukraine or Russia, and we remain in compliance with all relevant international trade regulations.”