A month ago, we told you that Foxconn, Apple’s largest contract manufacturer, She had to temporarily close her factory in Shenzhen for a few days thanks to the return of COVID. At the time, Foxconn said it would have to rely on backup plans to prevent disruptions.
today, Bloomberg reports that Pegatron, one of Apple’s two other Taiwan-based iPhone makers, has been forced to pause production in China as the country battles the worst COVID outbreak over the past two years. Pegatron’s factories in Shanghai and Kunshan, both of which produce iPhone models, have halted production and the decision to resume production will come from the government. Pegatron is currently trying to weigh the financial cost of stopping production.
Three positive tests for COVID have been reported in Pegatron’s Kunshan dormitory
Both plants remained open as local governments allowed some facilities to continue operating their assembly lines. Apple relies on Foxconn, Pegatron and Luxshare Precision to assemble its best-selling product, the iPhone. Unlike Foxconn and Pegatron, Luxshare is headquartered in China.
Apple CEO Tim Cook visits one of Apple’s three Chinese iPhone assembly facilities
In Shanghai, Communist Party Chairman Li Qiang promised to continue taking necessary measures to reduce the impact of the recent COVID outbreak. However, the city said Monday that it is partially easing the citywide lockdown even though most residents are still forced to follow travel restrictions.
The lockdown in Shanghai has already caused food shortages and in Kunshan, the city said it will continue to keep COVID policies in place despite the low number of cases. Residents of Kunshan were required to comply with the imposed restrictions. During the past four days, three positive tests for COVID were reported at the Pegatron dormitory in Kunshan.
The impact on the iPhone supply chain in China has been mixed; Suppliers in Shanghai were able to continue producing components but logistical issues prevented shipping of these components to contract manufacturers. As a result, according to consultancy Trendforce, Pegatron has only a few weeks of components left in stock.
The shutdown hasn’t affected iPhone SE stock, says Kuo
Top Apple Analyst Ming Chi Kuo
He posted a tweet today noting that iPhone SE 3 models made exclusively by Pegatron are still available in Apple’s online stores despite the shutdown in China. As Kuo notes, this is a strong sign that demand for the retro iPhone is weak because the shutdown has not affected the device’s inventory condition.
The Apple iPhone SE 3, made by Pegatron, is still in stock despite the company’s facilities being closed.
Kuo recently lowered its forecast for iPhone SE 3 shipments from a range of 25 million to 30 million units to a range of less than 15 million to 20 million units. Priced at $429 and up, the iPhone SE 3 is powered by the same 5nm A15 chipset that powers the iPhone 13 series, and includes support for 5G connectivity.
Over the course of two years when the pandemic was still in its early days in the United States, Apple told its Apple Store customers who handle iPhone repairs and replacements that replacement iPhone units were unavailable. A few days later, an informal survey of retailers and carriers in New York City showed that the latest iPhone models at the time were in short supply. The current shutdown and shutdown of iPhone production is not enough to disrupt phone supply as it was in 2020.
China has a strict zero-tolerance policy in place regarding COVID with reports of government officials knocking on the doors of residents in Shanghai to be tested for COVID. Those who have tested positive are reportedly being moved to a central location where they are isolated along with others who have tested positive.