China’s Lockdown Could Affect the Delivery of Tech Companies’ Products

Analysts informed that if China's COVID-19 lockdowns remain in place, shipments of some Apple products, along with Dell and Lenovo laptops are likely to get delayed as Covid curbs force assemblers to shut down and closed-loop arrangements get harder to maintain. China's efforts to contain the spread of COVID-19 have jammed highways and ports, stranded workers, and left countless factories awaiting government approval to reopen - disruptions that are crumbling through global supply chains. This week, Pegatron Corp, a supplier of Apple Inc said it would suspend its plants in Shanghai and Kunshan. According to supply chain experts, it manufactures the iPhone 13, the iPhone SE series, and other legacy models at these facilities. Analysts further informed that Quanta Computer Inc, which produces some three-quarters of Apple's Macbooks around the globe, also halted its operations. This could impact delivery more severely.

The ultimate impact on Apple's supply chain is uncertain and depends on many factors including how long the lockdown remains in force. Analysts further said that the company may also consider re-routing production out of Shanghai and Kunshan to factories elsewhere, such as Shenzhen, which currently is not under lockdown. Taipei-based Eddie Han, senior analyst at Isaiah Research said: "Apple may consider transferring the orders from Pegatron to Foxconn, but we expect the volume may be limited due to the logistics issue and the difficulty of equipment adjustment.”