The city of Shanghai, China has again implemented a lockdown due to a spike in COVID-19 cases. iPhone production in the city is also affected and as a result the stock of iPhones is predicted to decrease by up to millions of units.
Pegatron, one of Apple's partners in assembling the iPhone, said it would temporarily halt production at its factories in the cities of Shanghai and Kunshan. These two factories are believed to be the production sites for the iPhone 13, iPhone SE, and several other older iPhone series.
The impact of the lockdown on Apple's supply chain remains uncertain and depends on several factors, including the duration of the lockdown. Apple could also move production outside of Shanghai and Kushan, for example to Shenzhen, which is not currently under lockdown.
"Apple may be considering transferring orders from Pegatron to Foxconn, but we expect volumes to be limited due to logistical issues and difficulty fitting equipment," said Isaiah Research analyst Eddie Han.
Shanghai is currently entering its third week of lockdown and it is not known when it will reopen. As a worst-case scenario, if the lockdown in Shanghai continues for two months and Apple can't move production, iPhone shipments could drop by 6-10 million units.
Trendforce Research Manager Forrest Chen said if the lockdown was to be eased in the coming weeks, there was still a chance to recover.
"However, if the lockdown lasts more than two months, there is already no way to recover. At that time, after the lockdown is lifted, there will be a shortage of stock for end-users," Chen said.
In addition to the iPhone, MacBook production is predicted to be affected by the lockdown in Shanghai. The reason is, Quanta Computer, which produces three quarters of MacBooks globally, also temporarily closed its production.
The lockdown in Shanghai also affected not only Apple, but also Dell and Lenovo laptop production. But Compal Electronics, which manufactures laptops for Dell and Lenovo, said they had not closed their factories in Kunshan.
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