iPhone Production Won’t See a Big Impact From COVID-19 Lockdown in China’s Shenzhen, Say Analysts

Apple’s iPhone manufacturing won’t take a huge hit from Foxconn’s suspension of operations in the Chinese language metropolis of Shenzen, which is going through contemporary curbs to comprise a COVID outbreak, JP Morgan analysts mentioned.

Apple’s key provider Hon Hai Precision Business, often called Foxconn, mentioned it had suspended operations in Shenzhen till additional discover and would deploy backup vegetation to cut back disruption.

“We believe the impact from the Shenzhen lockdown on iPhone EMS build should be limited (~10 percent maximum of global iPhone production), due to low season and small production exposure to Shenzhen,” analyst Gokul Hariharan wrote in a observe dated Monday.

JP Morgan additionally mentioned the Shenzhen area represents lower than 20 % of complete iPhone manufacturing capability for Hon Hai, with overwhelming majority of meeting vegetation positioned in Zhengzhou, an industrial and transport hub.

Many factories in China, together with vegetation run by automakers Toyota and Volkswagen, had been suspended because of the restrictions.

The brokerage doesn’t anticipate an industry-wide restocking for elements because of these manufacturing suspensions, however warns that lockdowns in the Shanghai area may very well be extra disruptive.

The lockdown in Shenzhen, China’s Silicon Valley, won’t have a huge influence on semiconductor manufacturing, it mentioned, whereas including that world LCD panel provide may very well be harm.

© Thomson Reuters 2022

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