Apple, Other Manufacturers Face Major Shipment Delays as CCP Quarantine Policies Squeeze Suppliers

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Electronics giants like Apple, Dell, and Lenovo, will likely face serious shipping delays if the Chinese communist regime’s zero-tolerance COVID policies and subsequent lockdowns persist. The harsh restrictions are forcing manufacturers and suppliers to shut down, and closed loop arrangements become harder to maintain, analysts say.

The CEOs of Huawei and XPeng are also warning of huge economic costs if their factories in Shanghai cannot resume production soon.

The regime’s attempt to stop the spread of the Omicron variant of the Chines Communist Party (CCP) virus has clogged vital highways and ports, left countless factories under government shutdown, and millions of workers isolated in their homes.

Chinese logistical and transportation networks have become a nationwide issue as more and more cities enact lockdown measures across the country.

Shanghai has been on lockdown for nearly three weeks, with no sign of reopening, while Beijing’s policies are beginning to cause major disruptions that are affecting the global supply chain.

Apple’s supplier Pegatron, which produces the iPhone 13, the iPhone SE series, and other legacy models, suspended operations at its plants in Shanghai and Kunshan this week, on instructions from the CCP authorities.

Pegatron’s production schedules may be delayed to the point where it may fall behind on manufacturing up to 10 million iPhone devices, if the lockdown lasts two more months.

This would leave a massive gap in the computer market that will be hard to fill.

Quanta Computer Inc., which produces three-quarters of Apple’s MacBooks, also shut down operations, which will likely severely impact deliveries.

Apple is considering whether to re-route production out of Shanghai and Kunshan to factories in cities currently not under lockdown, such as Shenzhen.

So far, the total impact on the company’s supply chain is unknown and it depends on factors such as how long the lockdown mandates will persist.

Compal Electronics Inc., a Taiwanese company that makes PCs for Dell and Lenovo from its plants in Kunshan, told Reuters on April 15 that it had not halted production there.

Roughly 50 percent of Compal’s laptop production is estimated to be located in Kunshan.

Many companies heavily reliant on countries like China for their supply needs are now facing disaster due to the CCP’s lockdowns.

The global market, from smartphones to motor vehicles, has been affected by a global chip shortage due to manufacturing disruptions in East Asia.

Some suppliers may be able to re-route production, while others are struggling to do so due to logistics and the difficulty of adjusting equipment.

Reuters has contributed to this report.

Bryan Jung

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Bryan S. Jung is a native and resident of New York City with a background in politics and the legal industry. He graduated from Binghamton University.



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