In the southern Chinese city of Shenzhen, often referred to as the “Silicon Valley of China,” authorities have traditionally taken tough measures to curb the spread of a new coronavirus infection, and recently the local company Foxconn had to suspend production of the iPhone for the needs of Apple. Experts estimate that no more than 10% of Apple’s annual production program is at risk.
With such statements spoken Analysts from JP Morgan noting that the Shenzhen region has concentrated iPhone manufacturing capacity that accounts for no more than 20% of Foxconn’s total capacity. The rest of the production is mainly located in Zhengzhou, where the situation with the spread of the coronavirus is not yet worrying the Chinese authorities.
If we consider that now is not the peak season in terms of iPhone demand, no more than 10% of the production of smartphones in this family can suffer from the closure of Foxconn’s Shenzhen plant. In addition, the company is taking measures to redistribute orders in favor of other companies.
The situation in Shenzhen will not have a major impact on the supply of semiconductor components, according to JP Morgan officials, but may disrupt the supply chain of LCD panels manufactured in the region. Possible lockdowns in the Shanghai area are also dangerous, but in the current situation, the measures taken by the authorities in Shenzhen do not particularly threaten iPhone production.