Kunshan Lockdowns Add Stressors to Apple and Greater Supply Chain

11 APRIL 2022 - Another city in China has gone into zero-COVID lockdown, adding another stressor to Apple production. The South China Morning Post says Kunshan, about an hour’s drive from Shanghai, has ordered its 2.1-million residents to stay inside as the country seeks to stop the spread of the omicron variant of COVID-19. The site says “Factories in the city have been instructed to halt production since April 2, according to company statements…” Not everyone has had to, of course. Foxconn and Luxshare are both Apple suppliers with factories in the city. According to the report:

Both factories in Kunshan are still operating under “closed loops,” which confine staff to their quarters at the plants, with zero contact with outsiders. That slashes the productivity, as workers who live off-site cannot enter the plant, while daily Covid-19 tests disrupt the production cadence, according to people familiar with the matter.

As has often been the case since the start of the pandemic, it’s worse for companies not based in Cupertino. Kunshan is said by the piece to be home to a number of makers of printed circuit boards (PCBs) and original equipment manufacturers (OEMs). The report says:

Companies that have halted production include the PCB manufacturers Elite Material, Unimicron and WUS Printed Circuit, while the OEMs Wistron Corporation and Pegatron Corporation also suspended their production of computers, communications and consumer electronics for branded vendors.

The lockdowns in Kunshan are expected to be lifted tomorrow - Tuesday 12 April, provided the COVID situation does not get worse. Funny thing about COVID, though - it kind of does what it wants. We’ll see what happens.