Apple iPhone manufacturer says China lockdowns aren't hurting supply chain as much as feared
Apple supplier Foxconn in late March paused its operations in the key manufacturing city of Shenzhen after Chinese authorities locked down several major cities.
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Customers walk past a digital display of the new green color Apple iPhone 13 pro inside the Apple Store on 5th Avenue in Manhattan, in New York, March 18, 2022.
Mike Segar | Reuters
Foxconn, a major supplier of Apple's iPhones, said the impact of China's Covid lockdowns on its operations wasn't as bad as expected, Nikkei Asia reported Tuesday.
In late March, China ordered a series of lockdowns in some major cities after it saw a surge in coronavirus cases. Not long after, Foxconn said it would pause its operations in Shenzhen, a Chinese manufacturing hub where the company produces some iPhones, iPads and Macs.
Apple spooked investors last month when it warned that third-quarter sales could be hit by as much as $8 billion as a result of several challenges, including supply-chain constraints.
"Covid is difficult to predict," Apple CEO Tim Cook said on a conference call with analysts after the company reported its second-quarter results.
Foxconn Chairman Liu Young-way said the company has seen a more limited impact from the lockdowns than it anticipated, and it raised its outlook for the current quarter and the full year as a result, Nikkei said. Key manufacturing facilities have been operating at normal levels and product development is ongoing, the company said, according to Nikkei.
The comments don't necessarily mean Apple is totally in the clear from supply-chain constraints caused by Covid-19 lockdowns, or chip shortages, but it suggests the situation is at least improving for iPhone manufacturing. Apple's iPhone business generated $50.57 billion in revenue during Q2, a bulk of its $97.28 billion total revenue.
"The overall lockdown impact on Foxconn is rather limited," Young-way said, according to the report. "You can tell from our revenues in April, and May's performance is also better than we estimated."
