Pegatron Corporation, Apple’s second-largest iPhone foundry, said on Tuesday, April 12, that its plants in China’s Shanghai and the neighboring city of Kunshan have suspended production to comply with COVID-19 restrictions.

According to Nikkei Asia, Pegatron makes about 20% to 30% of Apple iPhones.

On Monday, April 11, Shanghai loosened its lockdown protocols after nearly three weeks of lockdown, though many citizens remained restricted.

Meanwhile, South China Morning Post reported that Kunshan, a city in Jiangsu Province, has ordered factories to close temporarily since April 2.

According to Reuters, Taiwan-based Pegatron said in a stock exchange filing that the resumption of the two factories is contingent on the government’s approval.

Pegatron said that it would keep in contact with customers and suppliers and actively cooperate with local governments to resume work as soon as possible.

Ming-Chi Kuo, an analyst at TF International Securities, tweeted, “In the best-case scenario, complete resumption of production may not be possible until late April or early May.”

He said that for the time being, Apple’s top iPhone assembler, Foxconn, could “fill the near-term supply gap” as it has not been affected by China’s COVID-19 policy.

Ming-Chi wrote, “Suppose Foxconn can maintain a regular operation, and Pegatron can gradually recover. In this case, the impact of the lockdown on iPhone supply will be short-term & limited.”

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