“China’s silicon valley” is blocked, does it affect the new iPhone launch date?

According to JP Morgan analysts, Apple Inc’s iPhone production will not be greatly affected by the suspension of Foxconn’s factory in Shenzhen city (Guangdong province, China). Reuters.

The city that is likened to China’s “silicon valley” is facing a blockade order, with new restrictions to prevent the Covid-19 outbreak.

Apple’s main supplier, Hon Hai Precision Industry, or Foxconn, said it has suspended operations in Shenzhen until further notice and will deploy backup factories to minimize disruptions.

Analyst Gokul Hariharan said on Monday:We believe the impact from the factory closure in Shenzhen production will be limited (up to 10% of iPhone production worldwide), due to low season and small output in Shenzhen“.

JP Morgan also said that Shenzhen accounts for less than 20% of Hon Hai’s total iPhone production capacity. Most of the assembly plants are located in Zhengzhou city (Henan, China), an industrial and transportation hub.

Many factories in China, including those operated by carmakers Toyota and Volkswagen, have been halted due to the newly imposed restrictions. The blockade in Shenzhen, China’s silicon valley, will not have a major impact on semiconductor production. There are warnings that closing Shanghai could cause more confusion.

  China's silicon valley is blocked, does it affect the new iPhone launch date?  - Photo 1.

The Foxconn factory in Shenzhen was once suspended due to a Zero Covid request from the local government. Photo: SCMP.

Bloomberg Updated on the evening of March 16, supplier Foxconn Technology Group of Apple Inc. has partially resumed operations in China’s Shenzhen technology hub. The company implemented a system that allows some manufacturing operations to restart while the city remains closed to limit the virus outbreak.

One of Foxconn’s two Shenzhen facilities will reopen, according to a statement on Wednesday. The Taiwanese-based company, also known as Hon Hai Precision Industry Co., said it had been approved by local authorities to restart production after adopting a “circular” management process. self-contained” across locations, a system that seeks to isolate employees from infection.

These operations were halted on Monday following an increase in Covid-19 infections in the locality. Shenzhen was locked down for a week, and it was also the first time China had implemented such restrictive measures in a city of its size and importance to the economy.

Restaurants and public transport have been closed. People are being asked not to leave their homes and cities for unnecessary reasons as authorities race to track cases and contain outbreaks.

According to Dy Khoa

Business and Marketing

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