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IPhone maker Pegatron is suspending production in Shanghai due to Covid

On March 18, 2022, in Manhattan, New York, an employee organizes Apple iPhones at the Apple Store on 5th Avenue.

Mike Segar Reuters

Apple iPhone assembler Pegatron has said it has suspended production in Shanghai and neighboring Kunshan amid austerity measures against Covid-19, according to numerous reports.

Shanghai authorities have imposed austerity measures to preserve the home as mainland China faced its worst COVID-19 outbreak since the initial phase of the pandemic in early 2020. These government blockades, which began in late March, threatened to disrupt global supply chains. And it shows the risks associated with Apple’s dependence on production in China.

Pegatron collects about 20% to 30% of all iPhones, according to Nikkei Asia. The Taiwanese company has so far been able to continue production because the Chinese government has allowed some manufacturers to continue working under a closed system to reduce the likelihood of infection, according to Bloomberg.

“The closure of Pegatron throws gasoline into a raging fire that is a supply chain for Apple and other parts of the iPhone ecosystem,” Wedbush analyst Dan Ives said in an email to CNBC. “This is not the news the bulls want to hear, as it exacerbates supply chain issues for the iPhone since Apple has seen improvement.”

Shares of Apple rose more than 1% this morning, indicating that investors are not worried about reports of production shutdowns.

This is the latest hit by Apple, which has just announced the release of new products, including the budget iPhone. Last month, Foxconn, a major iPhone collector, suspended full operation. He has since “basically” resumed normal work, according to Reuters.

Foxconn at the time said it would set up its production line elsewhere to minimize the impact. Nearly 50% of iPhones are made in a factory in Henan Province, according to a research record by Bank of America. But, according to Nikkei, the only operating Pegatron production facilities are in Shanghai and Kunshan. His new iPhone assembly plant in India has not yet started operating, the report said.

Apple declined to comment. Pegatron did not immediately respond to a request for comment.

Read more from Nikkei Asia.

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IPhone maker Pegatron is suspending production in Shanghai due to Covid

Source link IPhone maker Pegatron is suspending production in Shanghai due to Covid

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