According to Apple’S iPhone assembler, the supply chain image is stronger than expected

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Foxconn, a major assembler of Apple’s iPhones, said the impact of China’s Covid lockdowns on its operations wasn’t as bad as expected, Nikkei Asia reported Tuesday. In late March, China ordered a series of lockdowns in some major cities after it saw a surge in coronavirus cases. Not long after, Foxconn said it would pause its operations in Shenzhen, a Chinese manufacturing hub where the company produces some iPhones, iPads and Macs.

According to Nikkei Asia, Apple’s iPhone assembler stated the impact of Covid-19 lockdowns in China has been better than expected. Foxconn halted operations in Shenzhen, a key industrial location, in late March after Chinese authorities shut down several major cities. Customers walk through a computerised display of the new green colour Apple iPhone 13 pro inside the Apple Store on Fifth Avenue in Manhattan on March 18, 2022, in New York. On March 18, 2022, customers pass through a digital display showcasing the new green colour Apple iPhone 13 pro inside the Apple Store on Fifth Avenue in Manhattan, in New York.

Highlights

  • The comments don’t necessarily mean Apple is totally in the clear from supply chain constraints caused by Covid-19 lockdowns, or chip shortages, but it suggests the situation is at least improving for iPhone manufacturing. Apple’s iPhone business generated $50.57 billion in revenue during Q2, a bulk of its $97.28 billion total revenue. “The overall lockdown impact on Foxconn is rather limited,” Young-way said, according to the report. “You can tell from our revenues in April, and May’s performance is also better than we estimated.”

  • Apple spooked investors last month when it warned that fiscal third-quarter sales could be hurt by as much as $8 billion as a result of several challenges, including supply chain constraints. Covid is difficult to predict,” Apple CEO Tim Cook said on a conference call with analysts after the company reported its fiscal second-quarter results. Foxconn Chairman Liu Young-way said the company has seen a more limited impact from the lockdowns than it anticipated, and it raised its outlook for the current quarter and the full year as a result, Nikkei said. Key manufacturing facilities have been operating at normal levels and product development is ongoing, the company said, according to Nikkei.

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