According to the latest reports, analysts said that Apple’s supply chain has been severely hit by China’s COVID-19 epidemic blockade, and the situation is getting worse.
Apple’s previous shutdowns at three major suppliers affected the assembly of iPhones, iPads, and Macs. This has resulted in significant delays in ship-to-order MacBook Pro models. In a worst-case scenario, iPhone production could drop by as much as 10 million units.
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Background
The Shenzhen coronavirus lockdown forced Foxconn to halt iPhone assembly at two factories last month, but exemptions from closed-loop production and the company’s ability to switch to alternate facilities mean iPhone production hasn’t been severely hit.
Since then, however, the assembly of Apple products at the Pegatron, Quanta, and Compal factories has again stopped due to the pandemic. Foxconn’s factory in Zhengzhou is still operating as normal with additional COVID-19 precautions in place, and the latest situation is that the Zhengzhou City, China, near Foxconn’s main iPhone manufacturing plant, and parts of the Zhengzhou Airport Economic Comprehensive Experimental Zone have imposed an epidemic lockdown, which may Ultimately affect Apple’s supply chain.
Pandemic lockdowns could severely impact iPhone production
The situation could get worse, Reuters quoted analysts as saying. “If China’s COVID-19 lockdown continues, shipments of some Apple products, as well as Dell and Lenovo laptops, could face delays as restrictions force assemblers to close and closed-loop arrangements become harder to maintain,” analysts said.
The COVID-19 lockdowns have clogged highways and ports, stranded workers and countless factories await government approval to reopen — disruptions that are rippling through global supply chains. “
Eddie Han, senior analyst at Isaiah Research, described the worst-case scenario, “Apple may consider shifting orders from Pegatron to Foxconn, but due to logistical issues and equipment adjustment difficulties, we expect volumes may be limited, in a worst-case scenario, if the lockdown lasts for two months and Apple cannot reschedule orders, Pegatron may cut production by 6 million to 10 million iPhones.”
