“The lockdown couldn’t have come at a worse time or in a worse city,” Wedbush Securities managing director Dan Ives told The Washington Post. “If this continues for more than a week or two, it will be a setback for production.”
Foxconn did not immediately respond to a request for comment, but the company told the Wall Street Journal that it is shifting production from Shenzhen to unlocked factories elsewhere in China to help meet demand.
The ban comes just days before Apple is set to release new versions of its lower-cost iPhone SE and iPad Air.
YEH, SAM
The Foxconn layoffs come just days before Apple plans to release new versions of its lower-cost iPhone SE and iPad Air, as well as other new products. According to Ives, the immediate rollout of those devices should be unaffected because they have already been shipped.
However, an extended lockdown would have an impact on both the iPhone SE and Apple’s flagship iPhone 13, according to the analyst.
“In the end, Apple doesn’t have a demand problem; they have a supply problem that has gotten worse,” he explained.
Publishing in the Future
Toyota’s plant in the region, which manufactures RAV4 SUVs, was shut down indefinitely beginning Monday, according to spokesperson Shiori Hashimoto.
“We intend to resume operations as soon as the government’s instructions are received, as well as the safety and security of the local community and our business partners,” Hashimoto said. “At this time, other plants’ operations are unaffected.”
Volkswagen plants in the region that typically produce sedans under both the Volkswagen and Audi brands were closed on Monday, according to spokesperson Leslie Bothge. She stated that the company anticipates the shutdown will last until at least Wednesday.
An ongoing chip shortage in 2020 and 2021 stymied auto plant production and sent vehicle prices skyrocketing, contributing to overall inflation. Continued scarcity of new cars may contribute to high inflation in 2022.
The new wave of lockdowns also sent shivers through Chinese technology stocks. On Monday, Alibaba shares fell 9%, while Tencent shares fell 5.2 percent. The broad Shanghai Composite Index fell 2.6 percent.
Add Comment