Source: Apple
What you need to know
- New research has revealed that half of Apple's top 200 suppliers have facilities at risk of COVID lockdowns in China.
- The government is taking a zero-tolerance approach to COVID that could shut some factories.
- One supplier warned the disruption "could lead to a supply chain cutoff in the worst-case scenario."
New analysis has found that half of Apple's top 200 suppliers have facilities near Shanghai that could be at risk of disruption due to COVID lockdowns.
As reported by Nikkei Asia:
Half of Apple's 200 top suppliers have facilities in and around Shanghai, where COVID-related lockdowns and traffic restrictions are disrupting a wide swathe of business activities, a Nikkei Asia analysis has found.
More than 70 companies own manufacturing plants in Jiangsu Province that directly supply the U.S. tech giant, according to an analysis of Apple's latest available Supplier List. The majority of these are in Kunshan and Suzhou, the two cities near Shanghai. A further 30 or so Apple suppliers have facilities in Shanghai itself, the latest epicenter of the COVID-19 surge in China.
As the report notes these suppliers are makers of Apple's best iPhones such as the iPhone 13 and iPhone SE, as well as part makers for components used in other devices such as displays and speakers.
As the report notes, while some suppliers are on a White List to gradually resume operations, China remains committed to a zero-tolerance policy with regard to COVID. One chairman, AU Optronics' Paul Peng warned that "we think the impact is much more serious than the power outage last year as it involves a wide range of supply chain," further stating that "the disruption is not to a single company or industry, it's a global supply chain incident that could lead to a supply chain cutoff in the worst-case scenario."
Peng warned that it would take at least another quarter for normal production to resume and that suppliers were struggling for even the most basic goods, such as cardboard boxes, as well as truck drivers.
One source also told the outlet that an Apple supplier had halted operations in Suzhou due to logistics issues there and in Shanghai, with its own materials provider also shutting down. A Digitimes report today indicates that plants in Chengdu and Chongqing are also seeing inventory depletion because of the impact on Shanghai and Kunshan.
Reports indicate that Apple is already starting to feel the pinch on the supply of devices like the iPhone and MacBook Pro (2021) too, as the emerging threat of COVID once again rears its head as an operational headache for Apple.

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