Apple iPhone manufacturer said that China lockdowns aren't hurting the supply chain as they expected

June 2, 2022: -Foxconn, a major assembler of iPhones for Apple, said the impact of China’s Covid lockdowns on its operations wasn’t as bad as expected, Nikkei Asia reported on Tuesday.

In March, China ordered a series of lockdowns in some significant cities after seeing a surge in coronavirus cases. Not long after, Foxconn said it would pause its operations in Shenzhen, a Chinese manufacturing hub where the company produces some iPhones, iPads, and Macs.

In the previous month, Apple spooked investors when it warned that fiscal third-quarter sales could be hurt by almost $8 billion due to several challenges, including supply chain constraints.

“Covid is difficult to predict,” Apple CEO Tim Cook said on a conference call with analysts after reporting its fiscal second-quarter results.

Foxconn Chairman Liu Young-way said the group had seen a more limited impact from the lockdowns than expected, increasing its outlook for the recent quarter and the whole year. As an outcome, Nikkei said. Critical manufacturing facilities have been operating at normal levels, and product development is ongoing, the company said, according to Nikkei.

The statements don’t necessarily mean Apple is entirely in the clear from supply chain conditions caused by Covid-19 lockdowns or chip shortages. Still, it suggests the situation is at least enhancing for iPhone manufacturing.

Apple’s iPhone business forged $50.57 billion in revenue during the second quarter, a bulk of its $97.28 billion total revenue.

“The overall lockdown impact on Foxconn is rather limited,” Young-way said. “You can tell from our revenues in April and May’s performance is also better than we estimated,” he added.