Apple and others are having their shipment delays as China's COVID restricts the use of chemicals on suppliers

Apple and others are having their shipment delays as China's COVID restricts the use of chemicals on ...

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 controls force assemblers to shut down and closed-loop arrangements become harder to maintain.

China's attempt to disrupt COVID-19's expansion has hit roads and ports, stranded workers, and left many factories waiting for government permission to reopen, causing delays.

Pegatron Corp, an Apple Inc subsidiary, has stated that it will suspend its facilities in Shanghai and Kunshan, where, according to supply chain experts, it produces the iPhone 13, the iPhone SE series, and other previously scheduled models.

Quanta Computer Inc, which produces three-quarters of Apple's Macbooks globally, has closed its operations, which could result in more severe effects, according to analysts.

The final impact on Apple's supply chain is unconcerned and depends on factors, including how long lockdowns persist.

According to analysts, the company might also consider re-route production out of Shanghai and Kunshan to factories elsewhere, such as Shenzhen.

"Apple may elect to transfer orders from Pegatron to Foxconn, but we anticipate the volume to be limited because to the logistics dilemma and the difficulties of equipment adjustments," said Taipei-based Eddie Han, senior analyst at Isaiah Research. Foxconn is the trademark of Hon Hai Precision Industry Co Ltd.

Pegatron might fall behind on 6 million to 10 million iPhone units if lockdowns last two months have put Apple's orders in jeopardy.

Apple did not respond to a request for comment.

If Shanghai's stock markets aren't resumed soon, the executives of Huawei Technologies Co Ltd (HWT.UL) and Xpeng Inc have incurred significant economic expenses.

Shanghai is coming to a close after its third week of lockdown and has shown no sign of a large reopening.

Forrest Chen, a research manager at Trendforce, told Reuters that if lockdowns hit within a few weeks, there is still a chance to recover.

"If the lockdown lasts longer than two months, there is already no way to recover. At that point, there would be a shortage for end-users," he said.

Several suppliers may be able to re-route production.

Unimicron Technology Corp, which is manufacturing printed circuit boards for companies including Apple, told Reuters that the effect of the Kunshan shutdown so far has been minor, and that it may rely on other businesses in the Hubei province and Taiwan to support production.

As China enacts measures, logistics and transportation remain a national issue.

One customer in Kunshan told Reuters that the district government had given a protocol for reopening, but 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 manufacturing facilities in Kunshan, may also suffer. Chen estimates that roughly 50% of Compal's laptop production is located in Kunshan.

Compal told Reuters on Friday that its production in Kunshan had not been halted. Dell and Lenovo did not respond to requests for advice.

Our Standards:

You may also like: