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• Pegatron assembles about 20% to 30% of all iPhones
Taiwan’s Pegatron Corp, which assembles Apple Inc’s (NASDAQ: AAPL) iPhone, halted production in Shanghai and the nearby city of Kunshan on Tuesday as the Chinese government imposed restrictions to contain the surging COVID-19 cases.
Shanghai authorities have imposed strict stay-at-home measures as China faces its worst COVID-19 outbreak since the initial phase of the pandemic in early 2020.
Renewed outbreaks and strict lockdowns in China threaten to disrupt global supply chains and exacerbate risks associated with Apple’s reliance on manufacturing in China.
Global companies, from phone to chip makers, are highly dependent on China for production, and Taiwan’s Financial Supervisory Commission data shows a total of 161 listed Taiwanese companies reported their operations in Shanghai and Kunshan have stopped, among which 41 of them make electronics.
Pegatron assembles about 20% to 30% of all iPhones, Nikkei Asia reported.
The Taiwanese company had continued operating its manufacturing plant until now as the Chinese government allowed some firms to keep operations going via a closed-loop system to reduce the chances of infections, Bloomberg reported.
Reopening of its production facility will depend on notifications from the government, Pegatron said in an exchange filing.
“The Pegatron closures throws gasoline on the raging fire which is the supply chain for Apple and other parts of the iPhone ecosystem,” Wedbush analyst Dan Ives told CNBC in an email.
“This is not the news the bulls want to hear as this amplifies supply chain issues for iPhones just as Apple was seeing an improvement.”
Picture Credit: 9to5 Mac
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