Suppliers in China have been hit hard by COVID rules, which have led to shipping delays for Apple and other brands.
This is the name of the city in China. As a result of China’s COVID-19 lockdown, some Apple products, as well as Dell and Lenovo laptops, may not be shipped for a while. As a result of the lockdowns, assemblers have to stop working, and closed-loop arrangements become more difficult to maintain.
In China’s race to stop COVID-19 from spreading, roads and ports have been jammed and workers have been stranded, leaving many factories waiting for government approval to reopen. These disruptions have rippled through global supply chains, making it hard for people to buy things. More: Read more
Pegatron Corp. (4938. TW), an Apple supplier, said this week that it would close its plants in Shanghai and Kunshan, where it makes the iPhone 13, the iPhone SE series, and other old models. More: Read more
Quanta Computer Inc. (2382. TW), which makes about three-quarters of Apple’s Macbooks around the world, also stopped making Macbooks. In the words of analysts, this could have a bigger effect on MacBook sales than previously thought. info Read more
The final impact on Apple’s supply chain isn’t clear, and it depends on things like how long lockdowns last.
If the company decides to move production out of Shanghai and Kunshan to factories in other cities, like Shenzhen, which is not currently under lockdown, it might also think about moving production to other factories.
It’s possible that Apple could move the orders from Pegatron to Foxconn, but we think the volume will be limited because of the logistics problem and the difficulty of moving equipment. Eddie Han, a senior analyst at Isaiah Research in Taipei, said this: Foxconn is a trade name for Hon Hai Precision Industry Co Ltd, a company that makes things like computers and phones (2317.TW).
Han said Apple might not be able to change orders for 6 million to 10 million iPhones for two months. If that happens, Pegatron might be behind on 6 million to 10 million iPhones, Han said.
Apple didn’t answer a question about what they were doing.
They say that if factories in Shanghai don’t get back to work soon, it will have a big impact on the economy. more info: read more
Shanghai is nearing the end of its third week of lockdown. There has been no sign of a wide reopening.
He said that if lockdowns end in the next few weeks, there is still a chance to get back on track.
Even so, though, “After two months of being locked down, there is no way to get out of it. Afterward, there would be a shortage of end-users, “he said.
A few suppliers might be able to change the way they make things.
So far, Unimicron Technology Corp (3037. TW), which makes printed circuit boards for companies like Apple, told Reuters that, so far, the lockdown in Kunshan hasn’t had a big effect on its production. It can use other plants in the provinces of Hubei and Taiwan to keep production going.
But logistics and transportation are still a big problem in China, as cities across the country take action.
One factory owner in Kunshan told Reuters that the district government had set rules for reopening but didn’t say when they would start.
It could also hurt laptop makers, like Compal Electronics Inc (2324.TW), a Taiwanese company that makes PCs for Dell Technologies Inc (DELL.N,) and Lenovo Group Ltd (0992.HK) from its plants in China. Chen thinks that about half of Compal’s laptops are made in Kunshan.
Compal told Reuters on Friday that it had not stopped making things in Kunshan. Dell and Lenovo did not respond to emails that asked focommentsnt.
