(Bloomberg) — iPhone assembler Pegatron Corp. suspended production at its Chinese plants in Shanghai and Kunshan because the country's policies to contain the worst virus outbreak in two years disrupt global supply chains.
Resumption of production at the sites will depend on government notifications, Pegatron said in a statement Tuesday. The company continues to assess the impact of the suspension on its finances.
The Taiwanese company manufactures iPhones in Shanghai and Kunshan, both under lockdown as China adheres to its zero-covid strategy. Pegatron had been able to keep production going until now, as local governments allowed some manufacturers to maintain their operations with a closed-loop system that reduces the chances of workers becoming infected.
Pegatron shares iPhone assembly orders in China with major Taiwanese rival Foxconn Technology Group and Chinese peer Luxshare Precision Industry Co. Foxconn suspended some iPhone assembly work in Shenzhen for a few days in March due to covid-related restrictions.
Shanghai said Monday that it would partially ease lockdown throughout the city, but most of its residents are still subject to strict mobility restrictions. The multi-week lockdown triggered food shortages and threatened to expose already fragile supply chains to further turbulence.
The local government in Kunshan said it will maintain existing covid prevention policies despite a decrease in the number of cases, and will ask residents to fully comply with the measures. Local authorities reported three positive cases of coronavirus in Pegatron's bedroom in Kunshan in the past four days.
Widespread shutdowns in China are taking an unknown toll in the world's second economy, where most electronics are manufactured, from iPhones to laptops and PCs. While many of the most crucial factories in cities like Shanghai managed to stay operational, worsening logistics jams are restricting component shipments, exhausting inventories to the point where some manufacturers, including Pegatron, have inventory for only a few weeks, estimates the Trendforce consultant.
Original Note:
iPhone Maker Halts Plants as China Covid Battle Hits Tech Supply
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