Business World

Top iPhone supplier suspends production at two factories in China amid strict Covid lockdown

Apple’s top suppliers is stopping work at its factories in and around Shanghai as the city of 25 million people remains under a strict Covid lockdown.

Pegatron announced Tuesday that it had suspended production at its facility in China’s largest city, as well as the nearby city of Kunshan, until further notice.

“The date of factory resumption is to be advised by the local government,” the company said in a statement, adding that it would work with officials to resume operations “as soon as possible.”

Pegatron, a Taiwanese company that is known for making iPhones and other electronics, had previously been allowed to continue operating in Shanghai under a closed loop system that would keep essential workers in the factory and other personnel out.

It has joined a growing list of companies that have been disrupted by China’s latest surge of Covid-19 infections.

Shanghai, China’s financial hub and home to the regional headquarters of hundreds of international companies, has become the epicenter of China’s latest coronavirus outbreak, as well as the latest test of its “zero-Covid” strategy.

Since the latest wave started in March, the city has recorded more than 220,000 Covid cases, leading to strict stay-home orders and greater headaches for businesses.

The country’s auto industry has been particularly hard hit. Volkswagen said that its factories in Shanghai and Changchun, a Chinese manufacturing hub, had suspended production for weeks. Toyota reported a similar issue, saying its factory in Changchun had been shut for almost a month.

Tesla which has a Gigafactory in Shanghai, has also been forced to pause production since late March, according to Reuters.

Even before Pegatron’s announcement, Apple was having to deal with similar snags in its supply chain. Last month, Foxconn, its other big Taiwanese manufacturer, suspended operations in Shenzhen because of a lockdown in the city just north of Hong Kong.