The restrictions imposed by the Chinese government are expected to cause a new round of supply issues in the tech industry. Now, three important Apple product assemblers are either working under special rules or have halted production.
- Apple manufacturers are working under closed-loop systems or have halted production.
- The largest, Pegatron, which is responsible for around 20-30% of all iPhone production, has shut down.
- Other prominent tech manufacturers are facing similar problems due to Covid restrictions in China.
iPhones and other Apple products may become a bit more difficult to find in the future. The reason? Major manufacturers had to close down their production lines in China in accordance with local Covid restrictions. This has already affected the production of three million iPhones according to estimates by analysts.
The largest of them, a Taiwanese company named Pegatron, halted production in both of its factories in China in the areas of Shanghai and Kunshan. This is expected to have an impact on Apple, since the Cupertino giant relies on Pegatron for around 20-30% of the iPhone production.
The same source, Nikkei Asia, also mentions that these plants are the only iPhone assembly units of the company so it can be assumed that up to 30% of all iPhone production is paused. In addition, Compal Electronics which manufactures iPads and notebooks has also stopped production in Kunshan.
The wider impact of the latest covid restrictions will be felt across the industry. Other electronic manufacturers are facing similar pauses in production. Foxconn, Quanta, BizLink and more, which supply companies like Tesla, Dell, HP, and Apple are struggling to keep production, either halting their manufacturing or operating under a strict closed-loop protocol.
This protocol ensures the continuation of production by having all the necessary staff work and live on-site, while the line is mostly supplied by existing stock.
In total over 161 Taiwanese companies are affected in the areas of Kunshan and Shanghai. This will impact the already strained supply chain of electronics, which has been suffering from chip and component shortages since the beginning of the pandemic.
But what do you think? Are you worried about the electronics supply chain? Let me know in the comments.