In compliance with the Chinese government’s COVID-19 safety requirements, Taiwanese firm Pegatron, one of only a few firms that assemble Apple iPhones, has halted production at two Shanghai locations and one in Kunshan.
BBC News reports that China has taken harsh measures in response to the recent rise of COVID-19. Chinese authorities have already ordered vital Apple suppliers, such as Pegatron, to halt production. Pegatron may not be allowed to resume operations until early May, and the region’s lockdown policies have slowed MacBook Pro production overall.
Apple may look to shift iPhone and MacBook production to avoid China’s COVID precautions in the short term. Even with a shift, the company will not be able to compensate for the lack of production if China implements a 2-month lockdown.
According to Reuters, if the lockdown lasts 2 months, Pegatron alone could fall 6 to 10 million iPhones behind schedule.
Dan Ives, an analyst at the investment firm Wedbush Securities, said he thinks the shutdowns will have a considerable impact. Ives also told the BBC that the production of 2 million iPads and 1 million MacBooks might also be affected.
“The Pegatron closures throw gasoline on the raging fire which is the supply chain for Apple and other parts of the iPhone ecosystem,” Ives told the BBC. “This amplifies supply chain issues for iPhones.”
Foxconn, another Taiwanese company that assembles iPhones for Apple, shut down its Shenzhen factory last month. It shifted production to other manufacturing sites while resuming operations in Shenzhen with employees working in a closed-loop system where they lived and worked at the plant, The Hindu Stan Times reports.
The BBC reports that Quanta, the world’s largest contract notebook manufacturer and a key MacBook manufacturer, halted production at its crucial manufacturing site in Shanghai, Songjiang. Quanta has stopped operations since the beginning of April to comply with the government’s COVID-prevention measures.
Quanta, which makes laptops for Dell and HP, has about 20% of its capacity in Shanghai, Tech Story reports. It also makes some Internet of Things products and provides servers in the city for people outside of the United States. Compal Electronics, a well-known manufacturer of iPads and laptops, has also stopped operations in Kunshan.
Dozens of tech suppliers, including Unimicron and Nan Ya Printed Circuit Board, two critical printed circuit board producers, and BizLink, a significant Dell and Tesla supplier, have already announced that since April 2, they have ceased activities in and around Shanghai.
