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Analysts don't expect Foxconn's Shenzhen lockdown to hurt iPhone production

Foxconn
Foxconn (Image credit: Bloomberg)

What you need to know

  • Foxconn has had to close two Shenzhen facilities following a local COVID-19 outbreak.
  • Foxconn has offloaded some production to other plants.
  • Analysts don't expect Apple to suffer too badly.

Apple assembly partner Foxconn has had to close two Shenzhen campuses due to a new wave of COVID-19 in the region but J.P. Morgan analysts don't expect the move to have a major impact on the company's iPhone production.

The news that Shenzhen is in a fresh lockdown and that it's caused the closure of two Foxconn facilities broke on Monday. And while it's true that iPhone production has been halted as a result, it's thought that the company has been able to offload some manufacturing capacity to other factories. Now, Reuters reports that J.P. Morgan doesn't expect big waves as a result of the Foxconn closures.

"We believe the impact from the Shenzhen lockdown on iPhone EMS build should be limited (~10% maximum of global iPhone production), due to low season and small production exposure to Shenzhen," analyst Gokul Hariharan wrote in a note dated Monday.J.P.Morgan also said the Shenzhen region represents less than 20% of total iPhone production capacity for Hon Hai, with vast majority of assembly plants located in Zhengzhou, an industrial and transport hub.

Supplies of modern iPhone 13 handsets have begun to stabilize following months of uncertainty and the newly-announced iPhone SE goes on sale this coming Friday. The best iPhone is an iPhone you can actually buy — and that hasn't always been easy since the COVID-19 pandemic began two years ago. Apple will be hoping that a fresh batch of Foxconn factory closures isn't the beginning of another round of stock replenishment issues.

Oliver Haslam
Contributor

Oliver Haslam has written about Apple and the wider technology business for more than a decade with bylines on How-To Geek, PC Mag, iDownloadBlog, and many more. He has also been published in print for Macworld, including cover stories. At iMore, Oliver is involved in daily news coverage and, not being short of opinions, has been known to 'explain' those thoughts in more detail, too.

Having grown up using PCs and spending far too much money on graphics card and flashy RAM, Oliver switched to the Mac with a G5 iMac and hasn't looked back. Since then he's seen the growth of the smartphone world, backed by iPhone, and new product categories come and go. Current expertise includes iOS, macOS, streaming services, and pretty much anything that has a battery or plugs into a wall. Oliver also covers mobile gaming for iMore, with Apple Arcade a particular focus. He's been gaming since the Atari 2600 days and still struggles to comprehend the fact he can play console quality titles on his pocket computer.