Apple supplier Foxconn halts production at its Shenzhen plants after sudden COVID-19 outbreak

• Apple supplier Foxconn has been forced to shut down two of its plants in Shenzhen after a COVID-19 breakout in the city.
  
• Shenzhen alone reported over 3,000 cases, while the total tally across China crossed 5,000.
  
• The Foxconn plants will be shut down for at least a week, and re-opening will depend on the COVID-19 situation and local government guidelines.
  

Apple supplier Foxconn has halted production at its Shenzhen plant after a sudden COVID-19 outbreak led to the city shutting down once again. The local government in Shenzhen announced a COVID lockdown for a week, as cases crossed 5,000 across China with more cities announcing localised lockdowns.

According to a report by Bloomberg, Foxconn has suspended operations at two of its campuses in Shenzhen for at least a week, following guidelines issued by the local government. The Apple supplier has instead adjusted production at its other sites unaffected by the lockdown to help reduce the impact of disruption.

Out of the 5,000 cases across China, over 3,000 cases were reported in Shenzhen alone. As a result, the city has shut down everything except essential services – much like the lockdowns in India last year.

It is not clear when the production will be resumed at the two Foxconn plants in the area, but the coming week should make things a little clearer.

Analysts suggest it should not have a major impact on Apple supplies

Despite the shutdown of two Foxconn plants, analysts suggest it should not have a major impact on Apple supplies. A note by Bank of America suggests that 50% of iPhones are produced at a factory in the Henan province, which is also known as the ‘iPhone City’.

Additionally, other reports suggest that the demand for iPhones is not as high at this time, which should further soften the impact on Apple’s supply chain.

However, with the new iPhone SE, iPad Air 5 and other Apple products being announced recently, Apple might still feel the pinch if the shutdown continues.

Apple’s shares were down 2.7% as of market close on March 14.

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