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iPhone Production May Not Be Impacted Much by Foxconn Factory Shutdown Due to COVID-19

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Shenzhen saw a rise in COVID-19 cases, enforcing a lockdown that caused Foxconn to suspend its operations in the region until further notice. This decision also meant a halt in iPhone production. Fortunately, experts weigh in on the latest closure, stating that it will not hamper production as much as previously anticipated.

At Most, iPhone Production Is Expected to Be Hampered by 10 Percent

J.P. Morgan analyst Gokul Hariharan wrote in a note dated Monday that iPhone production will not be affected immensely.

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“We believe the impact from the Shenzhen lockdown on iPhone EMS build should be limited (~10% maximum of global iPhone production), due to low season and small production exposure to Shenzhen.”

The investment bank also says that Shenzhen represents less than 20 percent of the total iPhone production capacity for Foxconn. Zhengzhou, a transport and industrial hub of China, has a vast number of assembly plants, so Foxconn can simply ask to increase production in those facilities to make up for the loss in Shenzhen. Unfortunately, where the lockdown will unlikely hurt semiconductor production, it may have an impact on global LCD supply.

For those that do not know, Apple’s latest low-cost offering, the 2022 iPhone SE, features an LCD screen, and it may affect shipments down the line. This setback can mean developing regions may not receive shipments of the iPhone SE fast enough, which will, in turn, have a negative impact on Apple’s annual shipments. It is not clear if Foxconn can inform its other assembly plans to pick up production, but we will find out in the coming months.

Pre-orders for the 2022 iPhone SE began on March 11, and almost immediately, delivery times started slipping into late March for U.S. customers. Whether or not this lockdown will have an adverse impact on other Apple products, we will find out in the coming months, so stay tuned.

News Source: Reuters

Products mentioned in this post

iPhone SE
iPhone SE
USD 104.59

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