iPhone supplier Pegatron issues production warning over COVID lockdowns

Apple assembly partner Pegatron has advised production at a factory in Shanghai has been impacted by the COVID-19 lockdown, a warning that could harm the manufacturing of iPhones and other products.

Lockdowns have caused problems in China for manufacturers, with many assembly partners of Apple fighting to keep operations running as smoothly as possible despite lockdowns in Shanghai and other areas. One supplier, Pegatron, has confirmed it is struggling to deal with the situation.

Pegatron said on Thursday that the production of communications devices and consumer electronics for the quarter will be lower, due to the lockdowns. SCMP reports Pegatron didn't say how much the production levels would drop by.

The announcement arrives a month after Pegatron suspended operations at its Shanghai and Kunshan facilities, effectively cutting production at its only two manufacturing bases in China.

Pegatron assembles between 20% to 30% of all iPhone models, but it is unclear if the latest statement means Apple-related production will be hit or if it will impact Pegatron's other clients more.

Apple has already braced itself for impact from COVID-related disruptions. In its April financial results call, Apple's chief financial officer Luca Maestri said year-on-year revenue in the June quarter could be down $4 billion to $8 billion due to lockdowns and supply constraints.

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20 Comments

lkrupp

said about 1 year ago

Western manufacturers like Apple dug themselves into this pit of doing business with a totalitarian state for the cheap labor and massive human resources it provides. Climbing out of this pit is going to be a very time consuming and difficult task that will take years if not decades to accomplish. So get ready, people, for the long haul of reduced production, supply chain backups, political shenanigans. Be prepared to wait months for your precious iPhones and Macs to arrive.

mikethemartian

said about 1 year ago

Business 101. Diversify.

lkrupp

said about 1 year ago

mikethemartian said:

Business 101. Diversify.

Nope, not when there’s only one source of the skilled manpower required.

entropys

said about 1 year ago

Is that picture a scene from the upcoming Apple TV+ production of Metropolis?

crowley

said about 1 year ago

lkrupp said:

mikethemartian said:

Business 101. Diversify.

Nope, not when there’s only one source of the skilled manpower required.
Especially
when there's only one source of the skilled manpower required. That's a major point of weakness.

Apple got burned by being dependent on IBM for PowerPC, then by Intel, Imagination for graphics, Qualcomm for modems. In each case they worked or are working a solution to move away from that dependence. Of course they're doing the same with China, I look forward to seeing the effort fully realised.