As many as half of Apple’s suppliers in China may be under continued COVID-19 lockdowns, thereby leading to issues in the production process that could lead to a supply chain cut-off.
According to Nikkei Asia, half of Apple’s 200 top suppliers have production facilities in and around Shanghai. The COVID lockdowns have affected major production processes of these Apple suppliers.
The report stated that more than 70 companies that directly supply Apple have manufacturing plants in China’s Jiangsu Providence. The report also noted that most of the companies were located in Kunshan and Suzhou, near Shanghai. Shanghai has been the latest epicenter of the COVID-19 surge in China.
As China continues to impose lockdowns to contain the spread of COVID, manufacturers have feared the impact could be more serious than last year’s power outage. Paul Peng, Chairman of AU Optronics, said that COVID had caused disruption not just to a single company or industry but also to the global supply chain. He warned of a worst-case scenario wherein a supply chain cutoff could happen.
The effect of these lockdowns have been felt in the manufacturing of even the most basic good. It’s also been speculated that it may take at least another financial quarter before production returns to normal levels.
If Apple suppliers in China continue to be hampered by the lockdowns, it could just be a matter of time before Apple feels these effects. Difficulty may have started already, as there were reports that MacBook and iPhone supplies have started to dwindle.
Stay tuned for additional details as they become available.
Via The Mac Observer and Nikkei Asia