According to JP Morgan analysts, Foxconn’s suspension of operations in the Chinese city of Shenzen, which is facing further limits to contain a COVID epidemic, will have little impact on Apple’s iPhone manufacturing.
Hon Hai Precision Industry, also known as Foxconn, Apple’s main supplier, said it had temporarily halted operations in Shenzhen and will deploy backup plants to minimize inconvenience.
“We anticipate the impact of the Shenzhen lockout on iPhone EMS construction should be modest (maximum of 10% of global iPhone production),” analyst Gokul Hariharan wrote in a Monday note.
According to JP Morgan, the Shenzhen region accounts for less than 20% of Hon Hai’s overall iPhone manufacturing capacity, with the great bulk of assembly plants in Zhengzhou, an industrial and transportation hub.
Because of the restrictions, many factories in China have been shut down, including those owned by Toyota and Volkswagen.
Because of the production suspensions, the brokerage does not expect an industry-wide restocking of components, but warns that lockdowns in the Shanghai region could be more disruptive.
According to the report, the lockout in Shenzhen, China’s Silicon Valley, will have little influence on semiconductor production, but global LCD panel supply may be harmed.
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