Lockdown in China: the biggest blow to Apple in ages!!!

The most recent COVID-19 lockdown measures in China have led to Apple's manufacturing stopping at three major Chinese suppliers.

One of them could have a major impact on iPhone availability.

The production of iPhones, iPads, and Macs has been suspended at the electronic production hubs of Shanghai and Kushan.

But how will this affect Apple and its users?

Let’s find out together…

The News:

Apple's supply chain is experiencing prolonged disruptions due to China's strict COVID-19 security measures in the wake of the US's largest company's second-largest Chinese assembly plant halting production in important factories located in Shanghai and the nearby Kunshan.

Pegatron Corporation, an important manufacturer of electronics and a service provider to Apple, has ceased to make computers, communications devices, and consumer electronics for brands in Kunshan, the manufacturing center in the Chinese province of Jiangsu, after the city was put under lockdown last week.

The Taiwanese Pegatron's assembly lines in Shanghai, where a complete lockdown has been in effect for two weeks, have also stopped operations, as the Pegatron spokeswoman told the Post on Tuesday.

The company has been in contact with vendors and customers and is actively working with local governments to resume activities as quickly as possible. It is also continually reviewing the financial and business effects of the shutdowns.

Apple has not yet responded to a request for comments.

An Omicron infection in Shanghai and the surrounding industrial facilities has led to massive disruptions in manufacturing across the Yangtze River Delta.

Within Taiwanese businesses, just 161 companies have stopped the production process within Shanghai and Kunshan, the Taiwanese Financial Supervisory Commission said on Monday. According to a report published on the Apple website, at the
time of the fiscal period ending in 2020, Apple used a variety of vendors spread across Jiangsu province as well as Shanghai.

The manufacturing hub where many Taiwanese electronic manufacturers are located is also home to Apple distributors Foxconn and Luxshare Precision.

Both companies started the last week that their Kunshan factories continued to operate with the help of a "closed-loop management system," which restricted the staff inside the factories.

Apple's immediate effect of Pegatron's shutdown isn't significant to Apple. Ming-Chi Kuo, who is an analyst with TF International Securities, follows Appl.

However, continuous interruptions to the resilience of supply chains and consumers' confidence in the future.

Kuo continued to reiterate his most recent estimations made on March 28, the day that Shanghai began a lockdown in two phases, with the expectation that 15 million and 20 million iPhone SE will be delivered across the globe this year, a decrease from his previous forecast of 25 to 30-million units.

Kuo claimed that shipments were in danger of being affected even more as Shanghai's lockdown lasted.

"A full resumption of production (in Shanghai and Kunshan) might not be feasible until the end of April or even early May," he said.

"The more time the lockdown continues, the more detrimental the impact on confidence among consumers will be, and this could affect the shipments of consumer electronic devices."

The city's lockdown is set to end on Tuesday, while the authorities in Shanghai eased its lockdown the previous Monday by reclassifying a few districts as having low risk.

Pegatron announced that it was awaiting the advice of local governments regarding when its facilities might begin production.

Risks to supply chain operations are increasing in China as the authorities redouble their efforts on their zero-tolerance approach to the coronavirus. Foxconn,

The largest Apple manufacturing partner was forced to shut down its facilities in the tech hub to the south, Shenzhen, during a lockdown lasting a week last month, though Foxconn was able to resume production in the "closed-loop mode" after the lockdown was lifted.

China's cabinet, known as the State Council, has ordered local authorities not to interfere with transportation flow by blocking roads that are not necessary.

However, on the ground, truck drivers claimed they were unable to travel between cities because local governments have different requirements for quarantines and testing, according to Chinese press reports.