On Apr. 5, China went on a COVID-19 lockdown that affected three main factories manufacturing Apple products. Now, Foxconn announced that it is starting to operate the Zhengzhou factory normally.
Thousands of workers will now have to comply with mandatory COVID-19 testing, which could present a risk to the global supply of Apple's devices.
Apple Manufacturers Now in Operation
According to Bloomberg, the main iPhone-making complex in Zhengzhou has ordered compulsory testing for areas that include the plan and other parts of the city by local Chinese authorities.
The mass-testing exercise represents a risk because the Chinese officials have been very quick to lock down areas if one of the tests comes back positive.
More than 30 Taiwanese companies, including Pegatron Corp, a company that assembles iPhones for Apple, and Apple laptop maker Quanta Computer Inc., have now halted production in the electronics section of eastern China to comply with local COVID-related restrictions, spelling more trouble for a fragile global tech supply chain.
Even though Foxconn is trying to catch up with iPhone productions, Apple analyst Ming-Chi Kuo warns that the supply disruption has become a risk that the tech giant and its investors can't ignore in the future.
Unlike the other countries, China is betting on a zero-tolerance approach to COVID-19, including immediate lockdowns if even a couple of residents test positive, according to 9to5Mac.
Foxconn stated that it was complying with governments measures and confirmed that the operations in Zhengzhou are normal right now.
On Wednesday, Apr. 13, analyst Ming-Chi Kuo said that ship dates from some Apple products have slipped after China went into lockdown.
While the MacBook Pro has become more and more difficult to find in the market, the iPhone SE 3 is still available everywhere, showing the lack of demand for the device.
With mandatory COVID-19 testing in Zhengzhou, the public will have to see how long the primary factory in China will operate as normal before it gets shut down again.
Pegatron's Shutdown
According to The Verge, the shutdown of the plant could have a significant impact on both Apple and Pegatron. Pegatron plants are the tech company's only iPhone manufacturing hub, and it is responsible for making around 30% of all iPhones.
Pegatron is waiting to resume its production very soon, though it is not clear exactly when it might happen.
After Pegatron halted its production, the shares of Apple closed up more than 1%, which suggests that investors are not concerned about the suspension.
According to CNBC, Apple stated that its investors anticipate softness in these areas over the next couple of months.
Despite this, the tech giants believe that the demand is not affected, and they believe the sales will pick up again once the production goes back to normal.
Issues with the supply chain have been a consistent issue during the pandemic. It has affected companies across several industries.
Tesla was also forced to close its Shanghai factory due to China's new restrictions. The global chip shortage has made it more difficult to purchase all sorts of consumer electronics.
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Written by Sophie Webster
