Malcolm Owen
Apple assembly partner Pegatron has advised production at a factory in Shanghai has been impacted by the COVID-19 lockdown, a warning that could harm the manufacturing of iPhones and other products.
Lockdowns have caused problems in China for manufacturers, with many assembly partners of Apple fighting to keep operations running as smoothly as possible despite lockdowns in Shanghai and other areas. One supplier, Pegatron, has confirmed it is struggling to deal with the situation.
Pegatron said on Thursday that the production of communications devices and consumer electronics for the quarter will be lower, due to the lockdowns. SCMP reports Pegatron didn't say how much the production levels would drop by.
The announcement arrives a month after Pegatron suspended operations at its Shanghai and Kunshan facilities, effectively cutting production at its only two manufacturing bases in China.
Pegatron assembles between 20% to 30% of all iPhone models, but it is unclear if the latest statement means Apple-related production will be hit or if it will impact Pegatron's other clients more.
Apple has already braced itself for impact from COVID-related disruptions. In its April financial results call, Apple's chief financial officer Luca Maestri said year-on-year revenue in the June quarter could be down $4 billion to $8 billion due to lockdowns and supply constraints.
Charles Martin
Christine McKee
Oliver Haslam
20 Comments
Western manufacturers like Apple dug themselves into this pit of doing business with a totalitarian state for the cheap labor and massive human resources it provides. Climbing out of this pit is going to be a very time consuming and difficult task that will take years if not decades to accomplish. So get ready, people, for the long haul of reduced production, supply chain backups, political shenanigans. Be prepared to wait months for your precious iPhones and Macs to arrive.
Business 101. Diversify.
Is that picture a scene from the upcoming Apple TV+ production of Metropolis?