A COVID-19 outbreak in Shenzhen and a subsequent lockdown could impact the production of a wide range of electronics, including Apple's MacBooks and iPhones. After two years of COVID-related lockdowns and restrictions, things are finally returning to a semblance of normalcy in many parts of the world. However, the disease is far from contained, and the pandemic is far from over. Sporadic outbreaks are still common in many parts of the world, and the latest situation in Shenzhen and Shanghai is just a reminder of just how big a problem this still is.
Last week, Apple announced a slew of new gadgets at its 'Peek Performance' event. The lineup included the third-generation iPhone SE, iPad Air 5, a brand new Mac Studio desktop and the new Apple Studio Display. While Apple unveiled no new MacBooks during the event, rumors suggest that a new MacBook Air and a couple of MacBook Pro models may be coming later this year. However, for now, the existing offerings may be in short supply if the lockdown in Shenzhen drags on for any length of time.
According to Nikkei Asia, authorities in Shenzhen and Shanghai have issued lockdown orders due to COVID-19 outbreaks in the two cities. The Shenzhen government on Sunday night ordered all non-essential businesses to shut shop for seven days from Monday through March 20, and the rule applies to "all industrial parks and residential areas" in the city. The only institutions that will remain open during this week are markets, pharmacies, hospitals and other essential businesses. One of the companies affected by the lockdown is Foxconn, which manufactures a host of Apple products under contract from the Cupertino company. One of Foxconn's largest facilities is in Shenzhen, which will remain closed for the next week, affecting the supply of Apple products.
The Shenzhen Lockdown Is Bad News
The Shenzhen lockdown will affect Apple and many other consumer electronics companies as well, including Samsung. One of Foxconn's subsidiaries, General Interface Solution (GIS) Holding, is also reportedly stopping production at its Shenzhen facility for a week. The company manufactures touch-screen panels and counts Samsung as one of its clients, which suggests a prolonged lockdown could impact the availability of Samsung smartphones as well. In addition, many Chinese companies like Huawei, Tencent, and Oppo are headquartered in Shenzhen, which means they will also be affected by the situation in the city.
The lockdown, however, is not expected to worsen the global chip shortage despite one of the key players in the industry, Unimicron, having to also shut down its Shenzhen factory to comply with local regulations. According to the report, Unimicron is Taiwan's biggest PCB (printed circuit board) maker and a key supplier to Apple, Intel and Nvidia. However, its Shenzhen plant doesn't manufacture any Ajinomoto build-up film (ABF) substrate, a key ingredient in modern microprocessors, which means the lockdown is unlikely to impact its supply in the short term negatively.
Source: Nikkei Asia