Apple’s iPhone production will not take a big hit from Foxconn’s suspension of operations in the Chinese city of Shenzen, which is facing fresh curbs to contain a COVID outbreak, JP Morgan analysts said.
“We believe the impact from the Shenzhen lockdown on iPhone EMS build should be limited (~10 percent maximum of global iPhone production), due to low season and small production exposure to Shenzhen,” analyst Gokul Hariharan wrote in a note dated Monday.
JP Morgan also said the Shenzhen region represents less than 20 percent of total iPhone production capacity for Hon Hai, with vast majority of assembly plants located in Zhengzhou, an industrial and transport hub.
The brokerage does not anticipate an industry-wide restocking for components due to these production suspensions, but warns that lockdowns in the Shanghai region could be more disruptive.
© Thomson Reuters 2022