Apple’s iPhone supplier Pegatron cuts production in Shanghai factory as city’s strict Covid-19 lockdown limits output

Apple’s tightly managed supply chain network has taken another hit in mainland China, as Taiwanese contract manufacturer Pegatron Corp cut production at its factory in Shanghai, where a strict Covid-19 lockdown remains in force.

Pegatron, one of Apple’s largest suppliers focused on certain iPhone models, said on Thursday that its production of communications devices and consumer electronics will decrease this quarter because operations at its major assembly plant in Shanghai are constrained by the citywide lockdown measures. It did not elaborate on the specific volume of products to be reduced.

New iPhone models, including the latest iPhone SE series, are likely to see a drop in overall volume this quarter because of the supply chain disruptions on the mainland, according to Ivan Lam, a Hong Kong-based senior analyst at Counterpoint Research.

Last month, Pegatron suspended production at its key factories in Shanghai and nearby Kunshan, a city in eastern Jiangsu province. The Kunshan plant has reportedly resumed production after the local government lifted some control measures.