Despite increased Covid-related restrictions in China, Apple analysts see a “limited impact” from the Shenzhen iPhone factory shutdown.
China’s efforts to curb its largest COVID-19 outbreak in two years has forced Apple suppliers such as Foxconn to automakers Toyota and Volkswagen to suspend some operations, raising concerns over supply chain disruptions.
Multiple Chinese provinces and cities have tightened restrictions in line with Beijing’s zero-tolerance goal of suppressing contagion as quickly as possible, among them the southern Chinese tech hub of Shenzhen.
“The operation of Foxconn in Shenzhen China has been suspended from March 14 onwards in compliance with the local government’s new COVID-19 policy,” the company said. “The date of factory resumption is to be advised by the local government.”
“Due to our diversified production sites in China, we have adjusted the production line to minimize the potential impact,” Foxconn said.
Foxconn produces some iPhones, iPads, and Macs in Shenzhen. However, almost 50 percent of iPhones are produced at a factory in Henan province. Apple can start to ramp up production in Henan province to recoup some of those losses.
Analysts at Piper Sandler said they don’t “see a significant impact to iPhone production/supply” because of the lockdown. Piper Sandler noted that the major production location for the iPhone is in Zhengzhou, which isn’t currently facing a Covid-related lockdown (via Ped30).
“With the March quarter typically being a lower seasonal quarter, we believe any impact on production from the Shenzhen facility could be transferred to other sites, leaving limited impact,” Piper Sandler analysts said in their research note.