Several new reports indicate that major Apple suppliers have been forced to suspend operations in China due to the COVID-19 lockdown.
On Monday, analyst and supply chain insider Ming-Chi Kuo said on Twitter:
China’s COVID-19 lockdown is starting to affect iPhone assembly. Pegatron, the second largest iPhone EMS, has already halted assembly in Shanghai and Kunshan. In the best case scenario, full resumption of production may not be possible until late April or early May.
Kuo said Foxconn, Apple’s biggest supplier, remains unaffected and could fill the gap, but it would still make up for a brief interruption in iPhone supply. He further said that the longer the lockdown lasts, the more damaging it will be to supply and consumer confidence.
That report was reiterated on Tuesday by Nikkei Asia, which reported that three major Apple suppliers have suspended production near Shanghai as a result of the strict measures:
Three major Apple suppliers have suspended production in and near Shanghai as strict COVID-19 lockdown measures show signs of affecting the US tech giant’s supply chain in China.
Pegatron says two sites in Shanghai and Kunshan have suspended production to comply with government regulations. As the report states, Pegatron makes 20-30% of all of Apple’s best iPhones, including the iPhone 13, and these are its only two iPhone plants.
Another supplier, Quanta, which makes MacBooks for Apple, says it has halted production in Shanghai since early April for the same reason. Finally, Comple Electronics, a “major iPad and notebook maker”, has suspended activities at its Kushan facilities.
Luxshare Precision Industry, an iPhone maker in the area, says its only plant in Kunshan continues to operate under closed-loop management. This means, as reported in the early months of the pandemic in 2020, all workers are confined to living and working on site to prevent disruption caused by the spread of the virus.
Because of this latest disruption, the news will be unwelcome to Apple and its shareholders, as well as customers hoping to get their hands on the latest devices.
The only relief for Apple is that production of the iPhone SE is low-key as demand for the device is much lower than expected.