China Chipmaker and Apple iPhone Supplier Succumb to Covid Lockdowns
China’s biggest chipmaker and a major iPhone supplier cut their outlooks for the second quarter, joining a growing list of manufacturers warning about the fallout from lockdowns aimed at containing the country’s worst Covid outbreak in two years.
Semiconductor Manufacturing International Co. estimates a month-long lockdown in Shanghai could spur component shortages and logistics tangles and erase roughly 5% of its output in the second quarter. And Pegatron Corp. slashed its outlook for notebook shipments to a decline of between 5% and 10% from the first three months-- versus previous guidance for a rise of 25% to 30%.
“We are trying our best to mitigate the impact on product delivery,” SMIC Chairman Gao Yonggang told analysts on a call Friday morning. “We are still assessing the actual impact as many suppliers restart their operation.”
China’s Covid Zero strategy, which relies on a playbook of closed borders, quarantines, lockdowns and mass testing, is up-ending its giant manufacturing sector even as the rest of the world lives with Covid and opens up. The impact has been particularly keen in the eastern region around Shanghai, which is struggling to contain an outbreak. Hua Hong Semiconductor Ltd., another Shanghai-based chipmaker, also warned of potential impact from lockdowns and logistic disruptions on Thursday.
Some have bucked the trend. Hon Hai Precision Industry Co., whose main iPhone production base is further inland in Zhengzhou, expects revenue to remain little changed this quarter. Like many companies, it has managed to keep its plants humming by employing closed-loop production sites.
SMIC jumped as much as 3.1% in Hong Kong on Friday after reporting profit more than doubled in the first three months, thanks to
Read more on tech.hindustantimes.com
