Vendors for Apple Inc.

AAPL -2.09%

are among the top priorities in local government efforts to restart factories in the Shanghai region, as the US technology giant, faced with supply constraints, warned that a resurgence of the pandemic in China could reduce sales.

Over the past month, Covid-19 outbreaks have engulfed Shanghai and neighboring Jiangsu and Zhejiang provinces, a region with one of the highest concentrations of major Apple vendors, according to a list of vendors the company released last year.

In Shanghai, 31 companies manage production facilities that supply Apple, while 79 in Jiangsu and seven in Zhejiang, the list shows.

As Shanghai closed and nearby regions imposed tough measures to prevent Covid, many suppliers stopped production, some shutdowns lasting weeks.

As economic problems escalate due to politics, China is seeking to resume factory operations, striving to be still gradual and sometimes inconvenient. In Kunshan, a city in Jiangsu Province about 30 miles west of Shanghai, local authorities last week released a list that identified several major Apple vendors, including Luxshare Precision Industry Co. and Wistron Corp.

as businesses without Covid, giving them priority in resuming production.

Workers in Foshan, China, put on masks on the spot in February 2020. Cases of Covid-19 in the country have forced some plants to create a bubble-like environment to keep working.


alex plavevski / Shutterstock

China’s central government has promised to help restart factories, including Taiwanese manufacturers. “We will continue to work with the relevant authorities to actively help Taiwanese companies overcome the effects of the pandemic and help them resume production and operations as soon as possible,” Ma Xiaoguan, a spokesman for Taiwan’s China Office, said Wednesday. Many Apple vendors are located in Taiwan.

The impact of regional failures on Apple depends on how quickly and widely its vendors will be able to resume operations. The company warned on Thursday that supply restrictions, in part due to pandemic disruptions, would hurt revenue by as much as $ 8 billion this quarter. Apple did not immediately respond to a request for comment.

CEO Tim Cook said Thursday that Apple’s restrictions are mostly centered around the Shanghai Corridor. The company’s estimate of $ 8 billion in affected sales reflects the various buildups needed to resume production, he said.

“On a positive note, almost all of the affected final assembly plants have now been restarted,” Mr Cook said. “We are also pleased that the number of Covid cases reported in Shanghai has decreased over the past few days.”

Beijing is seeking to test more than 20 million people as residents seek to stockpile food. Jonathan Cheng of the WSJ reveals what life is like in the capital, and reveals the possible consequences of the morbidity if officials fail to control the virus, which is spreading rapidly. Photo: Kevin Frayer / Getty Images

Over the first three months of the year, restrictions on Apple’s supply chain have improved, Mr Cook said. Bernstein Research analyst Tony Sakonagi estimates the effect, which during this period damaged revenue by $ 1-2 billion compared to $ 6-7 billion during holiday shopping during the last three months of 2021.

Due to uncertainty, Apple has not given revenue recommendations for the current quarter, which ends in June, although some analysts interpret the company’s comments to show that sales will be equal to $ 81 billion a year ago. By Thursday, analysts had forecast average revenue growth of 6% to $ 86.4 billion, according to FactSet.

Some Apple vendors have restarted factories in recent days in a bubble-like environment where workers are kept on factory premises or nearby and are often inspected by Covid. The model is becoming increasingly popular in China to continue production amid an outbreak.

UniMicron technology The company

, a major PCB supplier in Taiwan, said Thursday that it has resumed some production in Jiangsu. Earlier this month, UniMicron resumed work for just one day at one of its subsidiaries in Kunshan when authorities asked it to stop work to comply with local Covid prevention policies, the company said.

Quanta computer Inc.,

Leading MacBook assembler, which is also based in Taiwan, resumed part of production at its plant in Shanghai on April 15, the Xinhua state news agency reported last week. There’s about 2,000 workers out of more than 40,000 returned to produce products, including laptops for Apple. According to the Xinhua news agency, citing the plant’s director, by the end of April that number was expected to grow to about 6,000 workers. A Quanta spokesman declined to comment on the current recovery status.

Strict blocking policies aimed at ending the Covid-19 outbreak in Shanghai lowered the roadway in late March.



The number of Covid-19 cases in Shanghai seems to have declined in recent days, while cases in Jiangsu are declining. On Friday, Chinese health authorities reported 10,463 new infections transmitted locally across the country the day before, after correcting for previously reported asymptomatic cases that later turned symptomatic. Almost all new infections were in Shanghai.

While a growing number of cases in Beijing has raised concerns that it could face a blockade, Apple’s supply chain is limited in the capital and nearby regions. According to the list of suppliers, eight companies that supply Apple operate in and around Beijing.

Elsewhere in China, Foxconn Technology Group continued production at its largest iPhone assembly plant in the central Chinese city of Zhengzhou, even though the area where it is based has been partially closed since April 15, the company said.

Foxconn also adheres to a bubble system, keeping tens of thousands of workers and other personnel in or around the factory. They must undergo regular testing at Covid – at least 15 rounds have been conducted – and Foxconn has set up 88 test sites on its wide campus, the report said.

The district government is helping Foxconn receive and ship the necessary materials and products, while imported components and materials must be tested at Covid before they can be delivered to the plant, the company said. Foxconn will report results for the first quarter on May 12.

The extent of the effects of recent Covid outbreaks in China on the global electronics supply chain is becoming clearer as vendors publish quarterly results.

Chip maker STMicroelectronics NV lost production at its plant in Shenzhen in southern China in the first quarter due to a blockade, CEO Jean-Marc Sherry told investors this week.

Texas Instruments Inc.

cut its second-quarter revenue forecast by about 10%, citing logistics problems related to restrictions in China’s Covid. The manufacturer of analog semiconductors used in cars and electronics has been unable to ship products from its distribution centers to customers’ factories in China, especially in the Shanghai area, according to a profit report this week.

Write Yang Jie at

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