Apple’s supply chain is being badly hit by COVID-19 lockdowns in China, with the situation getting worse, say analysts. It follows Apple production being halted at three key suppliers, affecting iPhone, iPad, and Mac assembly. This has already seen shipping dates slip for build-to-order MacBook Pro models.
The worst-case scenario could see iPhone production falling behind by as many as 10 million units …
Background
While most countries are aiming to live with COVID-19 to a greater or lesser extent, China is instead attempting to eradicate the infection – likely in part because locally produced vaccines are less effective than those used in other countries.
A lockdown in Shenzhen last month forced Foxconn to halt iPhone assembly at two plants, though a combination of exemptions for closed-loop production and the company’s ability to switch to backup facilities meant that iPhone production wasn’t badly hit.
Since then, however, the assembly of Apple products has been halted in facilities belonging to Pegatron, Quanta, and Compal. Foxconn’s facility in Zhengzhou is still operating normally, with additional COVID-19 precautions, but it’s not certain how long that may last.
COVID-19 lockdowns could badly hit iPhone output
Analysts cited by Reuters say that the situation is likely to get worse.
Shipments of some Apple products, as well as Dell and Lenovo laptops are likely to face delays if China’s COVID-19 lockdowns persist, analysts said, as curbs force assemblers to shut down and closed-loop arrangements get harder to maintain.
China’s race to stop the spread of COVID-19 has jammed highways and ports, stranded workers and left countless factories awaiting government approval to reopen – disruptions that are rippling through global supply chains.
One analyst described the worst-case scenario.
“Apple may consider transferring the orders from Pegatron to Foxconn, but we expect the volume may be limited due to the logistics issue and the difficulty of equipment adjustment,” said Taipei-based Eddie Han, a senior analyst at Isaiah Research […]
As a worst-case scenario, Pegatron may fall behind on 6 million to 10 million iPhone units if the lockdowns last two months and Apple cannot reroute orders, Han said.
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