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iPhone supplier Pegatron suspends production at two factories in China

iPhone supplier Pegatron suspends production at two factories in China

Hong Kong
CNN Business

One of Apple’s biggest suppliers has stopped working 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 has halted production at its facility in China’s largest city, as well as in the nearby city of Kunshan, until further notice.

“The date for resuming the plant will be determined by the local government,” the company said in a statement, adding that it would work with officials to resume operations “as soon as possible.”

It was not immediately clear which types of manufacturing would be affected. Pegatron, a Taiwanese company known for making iPhones and other electronic devices, was previously allowed to continue operating in Shanghai under a closed-loop system that would keep essential factory workers and other employees abroad — according to reports from multiple outlets, including Bloomberg.

The company declined to comment further.

I joined A growing list of businesses disrupted by China’s latest wave of Covid-19 infections — and the resulting restrictions.

Shanghai, the financial center of China and home to the regional headquarters of hundreds of global companies, the epicenter of the recent coronavirus outbreak in China, as well as the latest test of their “zero Covid” strategy.

Since the latest wave began in March, the city has recorded more than 220,000 cases of Covid-19, leading to strict stay-at-home orders and bigger headaches for businesses.

The country’s auto industry has been hit hard. This week, Volkswagen (VLKAF) said its factories in Shanghai and Changchun, the Chinese manufacturing hub, have halted production for weeks. Toyota (TM) has reported a similar issue, saying that its Changchun plant has been closed for about a month.

Tesla (TSLA), which has its Gigafactory in Shanghai, has also had to pause production since late March, according to Reuters. The company did not respond to a request for comment from CNN Business.

On Saturday, electric car maker Nio (NIO) said it had also paused manufacturing, describing how its suppliers across China have “suspended production one by one” due to disruptions linked to the epidemic in recent weeks.

Even before the Pegatron announcement, Apple (AAPL) had to contend with similar hurdles in its supply chain. Last month, Foxconn, another large Taiwanese company, suspended operations in Shenzhen due to the lockdown in the city north of Hong Kong.

CNN’s Beijing office and Yongxiong in Seoul contributed to this report.

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