May 13, 2022

COVID-19 could hit Apple’s production schedules this quarter: report


Apple’s biggest supplier, Foxconn Technology, has been forced to suspend hiring at its complex in the central city of Zhengzhou, raising concerns about how it will disrupt Apple’s production schedules.

The Zhengzhou factory is the largest manufacturing plant for iPhones, the South China Morning Post reported last week, pointing out that the outlet would be closed for seven days until Tuesday this week.

The newspaper cites updates posted on Chinese social media sites by recruitment sites in the city that is the capital of Henan province.

The recent outbreaks of COVID-19 in Shanghai and Beijing have been difficult for China to eradicate.

Apple said when announcing its results late last month that it expects to spend billions of dollars in additional costs in the current quarter due to what have been called “challenges”. .

Chief Financial Officer Luca Maestri said on a conference call after the earnings announcement: “Supply constraints caused by COVID-related disruptions and industry-wide silicon shortages are impacting our ability to meet customer demand for our products”.

Apple said it expected to see a negative impact ranging from US$4 billion (A$5.67 billion) to US$8 billion, which Maestri said was much larger than what it said. he had experienced during the first quarter of 2022.

the SCMP The report says the disruptions in Zhengzhou could affect production because manufacturing was done using a so-called closed-loop system that doesn’t allow workers to leave campus.

He also quoted analyst Ivan Lam, who works with Counterpoint Research, as saying the main problem in Zhengzhou was logistics; the supply of parts from the factory took longer due to the additional procedures put in place due to the pandemic.

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