iPhone production threatened, 2 large factories in China closed due to Covid-19 1

iPhone production threatened, 2 large factories in China closed due to Covid-19

iPhone production is threatened by the re-limitation in China. Faced with the rise in Covid cases, the government has indeed restructured several cities. In response, Pegatron, one of Apple’s partners, had to close the doors of two factories. Thanks to its Indian factories, Apple would be able to minimize the impact on its chain. to feed

one of the responsible manufacturers, Pegatron Corp. Assembly of Apple iPhonesannounced the closure of two factories in Shanghai and Kunshan in China. The activities of the two factories have been suspended until further notice.

The shutdown of Pegatron is likely to have a significant impact on the iPhone supply. Indeed, the Taiwanese firm has approx. 20% to 30% of all iPhones Sold worldwide. Interview Nikkei, Pegatron “We hope to resume production soon” and keeps in constant communication “with its customers and suppliers”.

The firm states that the recovery depends solely on the goodwill of the Chinese authorities. As a reminder, Foxconn, another company responsible for assembling iPhones, had to close its doors last month. It was at Foxconn Closed its factory in Shenzhen over many days.

China is restructuring several cities in the face of rising Covid-19 cases

This decision was made following containment measures agreed by the Chinese authorities. Faced with a resurgence of Covid-19 cases, the government chose to re-contain parts of the country. For two weeks, Shanghai with a population of 25 million fully or partially restricted. Police ensure that incarceration is respected by the public, especially with the help of drones. Persons infected or in contact with a patient are sent to isolation camps.

This “zero Covid” policy has been fiercely criticized by the Chinese, who believe the measures are increasingly untenable. ““We must maintain this zero Covid policy, and we must do so relentlessly and without hesitation,” he said. however, Zheng Junhua, the director of a field hospital, is presumed to have been questioned by the French media.

Hundreds of factories in China suspended operations

In this content, a few more factories had to close. This is especially true for Quanta, which combines Apple MacBooks and many Dell PCs. The company has stopped production at its Shanghai facility since the beginning of April to comply with the Chinese government’s measures.

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companies specializing in printed circuitsOther iPhone assemblers like Unmicron and Nan Ya Printed Circuit Board and including Luxshare Precision Industry are also affected by the containment measures. 161 Taiwanese listed companies, including 41 electronics firms, reported in April that they had ceased operations in Shanghai and Kunshan.

This new spin on the screw is once again exacerbating the shortage of computer chips that has paralyzed the entire industry since the pandemic. Despite diversification efforts by Western giants, the industry remains heavily dependent on China and Southeast Asia. Experts believe that the semiconductor crisis will therefore prolong over time.

Apple would have managed to minimize the impact of the Pegatron shutdown

The situation is likely to continue, according to information provided by Ming-Chi Kuo, an analyst at TF International Securities and a respected industry source. “In the best-case scenario, a full resumption of production may not be possible before late April or early May”Ming-Chi reassures Kuo.

However, Apple Minimize the impact of Pegatron factory closures thanks to “strong supply chain” and maintaining good relations with the Chinese government. Apple, one of the key players in the industry, has managed to soften the positions of the authorities and obtain exemptions in the past.

To reduce its reliance on Chinese factories, Apple moved a significant portion of iPhone production to India. Wistron and Foxconn’s Indian factories now produce a significant portion of smartphones sold worldwide. Some of the iPhone SE and iPhone 12 are produced there.

Recently, the Cupertino group has also started producing iPhone 13s in India. The Foxconn factory, located in Sriperumbudur city in southern Tamil Nadu state, is now responsible for assembling several models in the series. Thanks to this strategy launched in 2020, Apple is no longer solely dependent on its Chinese partners. Its presence in India also allows the Californian group to benefit from generous financial assistance from the Indian government.

Resources: nikkei,

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