Apple iPhone creator Pegatron stops production in Shanghai because of the Covid pandemic
Key takeaways:
- Apple iPhone maker Pegatron has stopped production in Shanghai and Kunshan amid relentless Covid-19 prevention efforts.
- Shanghai authorities have set rigid stay-at-home measures as mainland China meets its worst Covid pandemic since the initial stage of the pandemic in early 2020.
- In March, it followed a similar suspension by Foxconn, a major assembler of iPhones.
According to numerous reports, Apple iPhone maker Pegatron said it had stopped production in Shanghai and Kunshan amid severe Covid-19 prevention measures.
Shanghai authorities have set stringent stay-at-home measures as mainland China meets its worst Covid pandemic since the initial stage of the pandemic in early 2020. Those government lockdowns, which started in late March, have disrupted international supply chains. And it reveals the risks associated with Apple’s reliance on manufacturing in China.
Pegatron assembles approximately 20% to 30% of all iPhones, Nikkei Asia reported. The firm has continued production till now because the Chinese government allowed some works to keep processes going via a closed-loop system to decrease the cases of infections, Bloomberg reported.
“The Pegatron shutdowns throw gasoline on the raging fire that is the supply chain for Apple and other areas of the iPhone ecosystem,” Wedbush critic Dan Ives told CNBC. “This is not the news the bulls want to listen to as this boosts supply chain issues for iPhones just as Apple was seeing an improvement.”
Shares of Apple were up almost 1% in the morning, suggesting investors aren’t concerned regarding information about the production suspension.
It’s the latest blow to Apple, revealing its latest slate of new products, including a budget iPhone. Foxconn, a primary creator of iPhones, suspended entire operations the previous month. It has since “essentially” resumed normal operations, according to Reuters.