The new lockdown in China due to the latest covid-19 outbreak is hitting electronics production hard, and Apple is one of those affected. Now, it is estimated that up to 10 million iPhones may not be produced with the cessation of activities of three of its main suppliers in the country. Among other products, iPad and Mac computers are also likely to face manufacturing limitations.
The iPhone 13 and iPhone SE are among the products affected by the lockdown in China (Image: Ehimetalor Akhere Unuabona/Unsplash)
Taiwanese company Pegatron Corp, Apple’s second-largest smartphone maker, announced this week the closure of major factories in Shanghai and Kunshan. This company is one of the main suppliers of Apple in China and produces devices such as iPhone 13, iPhone SE and other models of American society, according to experts consulted by the Reuter.
Another vendor, Quanta Computer, which accounts for about 25% of all global MacBook production, also halted operations in Shanghai. In practice, even with Apple’s contingency plans and the migration of production demand to other facilities not yet affected by the lockdown, such as Shenzhen, the impact should still be strong on the ability to deliver new products.
Chip shortages have already affected iPhone production
With the shortage of chips, we were already expecting a reduction in the production of several devices from the American firm, including iPhones. Nevertheless, the current pandemic situation in China seems to have aggravated the situation. Now the numbers are starting to take shape, according to analysis by experts interviewed by Reuter.
At worst, Apple could stop producing 10 million iPhones. The impact on the production chain of mobile phones and other products of the brand is still uncertain and depends on the duration of the new confinement in China. iPads and MacBooks matter too, and custom MacBook Pros have already had their shipping dates pushed back.
Foxconn, Apple’s largest global supplier, is expected to receive a production request so there is no major impact on the delivery of new iPhones. However, this company also halted smartphone assembly at two major factories in China last month. Even so, the facilities in Zhengzhou are still operating, with additional measures to protect against Covid-19.
China lockdown limits Apple’s options
Assembly of Apple products has already been halted at facilities owned by Pegatron, Quanta and Compal Electronics. Considering the current scenario and future predictions of the pandemic situation in China, the Experts say the supply problem is set to get worse..
Eddie Han, principal analyst at Isaiah Research, said Reuter that Apple “may consider transferring orders from Pegatron to Foxconn,” but he believes the volume could be limited due to logistical issues and difficulties involving equipment adjustments.
The expert described the worst-case scenario for Apple: being pessimistic, Pegatron could stop producing between 6 and 10 million iPhone units if the blockages last two months and Apple is unable to redirect orders.
Apple is not alone. Other brands also depend on Chinese factories and have seen their production affected by the country’s new confinement. Compal Electronics, which has stopped production of Apple laptops in Kunshan, is also a major supplier of Dell and Lenovowhich should suffer from the same problem and reduce the supply of new devices.
With information: Reuters
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