SHANGHAI/TAIPEI, April 15 (Reuters) - Shipments of some Apple products as well as Dell and Lenovo laptops are expected to be delayed if China's COVID-19 lockdowns persist, according to analysts, as restrictions force assemblers to shut down and closed-loop arrangements become less difficult to maintain.
China's attempt to stop the spread of COVID-19 has stowed roads and ports, left countless employees trapped waiting for government approval to reopen, causing havoc among newcomers. Problems that are ripping through worldwide supply chains.
Pegatron Corp, an Apple Inc subsidiary, said this week that it will suspend its offices in Shanghai and Kunshan, where, according to supply chain experts, it produces the iPhone 13, the iPhone SE series, and other previous models.
Quanta Computer Inc, which produces three-quarters of Apple's Macbooks globally, has shut down its operations, which is expected to impact the company's outputs much more.
The final impact on Apple's supply chain is uncertain, and it depends on factors, including how long lockdowns persist.
According to analysts, the company may also consider re-routing production from Shanghai and Kunshan to factories elsewhere, such as Shenzhen.
Apple may choose to transfer orders from Pegatron to Foxconn, but we anticipate the volume to be limited due to the logistics issue and the difficulties of equipment adjustment, according to Eddie Han, a senior analyst at Isaiah Research. Foxconn is the business name of Hon Hai Precision Industry Co Ltd.
Pegatron may fall behind on 6 million to 10 million iPhone units in the worst-case scenario, according to Han.
Apple did not respond to a request for clarification.
If Shanghai's factories cannot resume production in the near future, the chief executives of Huawei Technologies Co Ltd (HWT.UL) and Xpeng Inc have raised significant economic costs.
Shanghai is approaching its third week of lockdown and has not shown any signs of a large reopening.
According to Forrest Chen, the research manager at Trendforce, lockdowns will continue to rise in a few weeks.
"If the lockdown lasts longer than two months, there's already no way to recover," he said. At the same time, there would be a shortage for end-users.
Depending on how many suppliers may be able to re-organize production, there are certain variations.
Unimicron Technology Corp, which is supplying printed circuit boards for companies like Apple, has informed Reuters that the closure of Kunshan so far has been minimal and that it may rely on other facilities in the Hubei province and Taiwan to support production.
As China enacts measures, logistics and transportation remain a national issue.
One business owner in Kunshan told Reuters that the district government had given a protocol for reopening, but stated that there was no date for implementation.
Compal Electronics Inc, a Taiwan-based company that produces PCs for Dell Technologies Inc and Lenovo Group Ltd from its offices in Kunshan, may also suffer. Chen estimates that about 50% of Compal's laptop production is located in Kunshan.
Compal informed Reuters on Friday that it had not halted production in Kunshan. Dell and Lenovo did not respond to emails seeking a response.