Nikkei: Apple has a case of the Shanghai flu

From "Shanghai, Kunshan lockdowns hit iPhone, Mac and iPad makers" posted Tuesday:

Three key Apple suppliers have suspended production in and near Shanghai as strict COVID-19 lockdown measures show signs of affecting the U.S. tech giant's supply chain in China.

Pegatron, the iPhone assembler, said in a stock exchange filing on Tuesday that operations at its two production sites in Shanghai and the Chinese city of Kunshan have been suspended to comply with government regulations. These are Pegatron's only iPhone manufacturing bases, as its new iPhone assembly plant in India has not yet begun operation, Nikkei Asia has learned. Pegatron makes roughly 20% to 30% of all iPhones.

Pegatron told Nikkei Asia that it is in close communication with its clients and suppliers, while complying with local government regulations, and hopes to resume production soon.

Quanta, the world's biggest contract notebook manufacturer and a key MacBook maker, told Nikkei Asia that it has halted production at its key manufacturing site in the Songjiang district of Shanghai since the start of April in compliance with the government's COVID prevention measures. Quanta, which also counts Dell and HP as clients, has around 20% of its total notebook capacity in Shanghai. It also makes some Internet of Things products and servers for non-U.S. destinations in the city. Major iPad and notebook maker Compal Electronics also has halted activities at its Kunshan facilities, according to the company...

According to the latest survey by the Taiwan Financial Supervisory Commission published on Monday, about 161 Taiwan-listed companies, many of them electronics suppliers, have had to halt production in Shanghai and the Kunshan areas, one of the biggest electronics hubs in China. The latest wave of COVID-19 has also spread to Suzhou, Jiangsu Province, another key cluster of electronics suppliers.

My take: Still keeping an eye on Shanghai

See also: Shanghai’s COVID shutdown could be a problem for Apple

11 Comments

  1. Neal Guttenberg said:
    Will Nikkei be right this time with regards to Apple? Only time will tell but the story has some plausibility, at least at first reading.

    1
    April 12, 2022
  2. Jerry Doyle said:
    During the early weeks of Covid’s spread in this nation, there were citizens meeting with politicians and policy experts asking (if not demanding) a relaxed approach be taken to Covid. The president himself supported such an approach, “… that we live with the virus.” I remember that vividly. That approach called for by many citizens has proven correct. It was not to be.

    Those advocating that we learn to live with the virus were browbeaten, even at the highest levels in government such as the condemnation targeted at a sitting president. Yet, this past Sunday I cringed as I watched lividly even the most arduous foe during those early months of 2020, Anthony Stephen Fauci, embrace unabashedly such an America’s relaxed approach. It was a topic across Sunday talk TV. “…. This is not going to be eradicated, and it’s not going to be eliminated,” Dr. Anthony Fauci told Jon Karl on ABC’s “This Week.” Every individual is “going to have to make their calculation of the amount of risk that they want to take.”
    Shanghai’s suffering!
     
    Right now I’m reading every story I can find about China’s extreme attempts to contain Covid-19. There are, by some news accounts, up to 26 million people locked in their homes in Shanghai. It all reminded me of America in early 2020 with folk hiding out in their basements, offices shut down, businesses closing their doors and empty streets.
     
    Shanghai now is the center of China’s worst crisis since the early days of the pandemic. The WSJ has a news story about how “…. the outbreak has taken a larger toll on Shanghai than authorities have publicly acknowledged.” Citizen videos are helping to get the story out showing unrest over dwindling food supplies and confrontations with authorities.

    Continue….

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    April 12, 2022
  3. Jerry Doyle said:
    Continued
     
    I second what former FT editor Lionel Barber tweeted this past Sunday, “….Shanghai lockdown story is really worth watching – alongside Ukraine war and collapse of French centre.” He added, “Good journalists can walk & chew gum at the same time.”
     
    As the BBC put it, “China is one of the last remaining nations still committed to eradicating Covid, in contrast to most of the world which is trying to live with the virus in its Omicron variation.”
     
    And yet, here I sat Sunday listening to America’s relaxed approach as a topic across Sunday talk TV. “….This is not going to be eradicated, and it’s not going to be eliminated,” harked Dr. Anthony Fauci to Jon Karl on ABC’s “This Week.” Fauci was on to another calling: “Every individual is going to have to make their calculation of the amount of risk that they want to take.” Say what?
     
    If China has proven anything to us it is that this disease cannot be eradicated, that one can’t run and hide out. One must learn to live with it through taking proper and judicious health and social measures.

    Today, we still are paying the price of foolish policy measures imposed on the American people along with seeing them played out real time in China who has gotten everything wrong with this virus including being the origin from where it came.

    3
    April 12, 2022
    • Nicholas Watland said:
      Excellent post Jerry!

      0
      April 12, 2022
  4. Fred Stein said:
    Good news: AppleInsider just relayed Harsh Kumar’s note that Apple is NOT significantly impacted by the shutdowns in Shanghai. Apple have built in redundancy. And, Harsh echoes Joseph’s point that the demand surge is behind us.

    And maintain’s $200 PT – that’s cool.

    3
    April 12, 2022
  5. Bart Yee said:
    One of China’s biggest problems with battling Covid is the poor performance of the SinoVac and SinoPharm non-mRNA vaccines most used by China and some countries (Brazil, Pakistan, Turkey the three largest). Both vaccines produce antibodies which are at best about 55% and 78% effective against the original alpha strain. Per The NY Times “Sinovac has shown to be only 51 percent effective against preventing symptomatic disease, according to scientists in Brazil. The World Health Organization said Sinopharm has an efficacy of 78 percent.”

    And per Nature “In mid-2021, the World Health Organization (WHO) approved the shots for emergency use, on the basis of limited clinical-trial data suggesting that CoronaVac was 51% and Sinopharm 79% effective at preventing symptomatic disease. This was on a par with the 63% efficacy reported for the University of Oxford–AstraZeneca’s viral-vector vaccine at the time of its WHO listing, but lower than the 90% and higher efficacies of the mRNA vaccines developed by Pfizer–BioNTech and Moderna.

    Both the Chinese vaccines are inactivated vaccines, which use killed SARS-CoV-2 virus. Researchers say this type of vaccine seems to be less potent because it triggers an immune response against many viral proteins. By contrast, mRNA and viral-vector vaccines target the response to the spike protein, which is what the virus uses to enter human cells.”

    Another issue is the relatively short life before waning immunity and the poor ability of China’s vaccines to be used for boosters. Despite a very good 88% immunization rate, Overall China immunity levels dropped rapidly over time. Brazilian research suggests China vaccines as boosters are better than nothing in >60 y/o patients but a mix and match with mRNA boosters would be much more effective.

    And Brazil has/had a very non-interventional “live with it” response to Covid under President Bolsonaro. I will note Brazil ranks 3rd in cases w/30.2M (behind US 80.3M, India 43M) and 2nd in deaths w/662K (behind only US 984K & ahead of India’s 522K).

    1
    April 12, 2022
  6. Bart Yee said:
    IMO, China adopted its current Covid policies partly to prevent infection from getting into the country because Chinese vaccines have proven relatively poorly against Alpha and delta variants. Studies that came from China say their vaccines are >70% effective against delta but they included only about 100 patients over a two month interval in 2021. IMO, the telling action was most SE Asian countries that initially relied on the China vaccines moved quickly away from them to Western vaccines when delta hit.

    Omicron has been a much different worry in that ALL vaccines have less activity again the highly transmissible variants’ infection rate but the mRNA vaccines still provide good activity in preventing serious illness and death. Couple this with Omicron variants having less virulence or severity overall, and we (the US) are getting through the omicron surge reasonably well despite less than full immunization rate and herd immunity than was previously targeted and hoped for.

    IMO, Fauci and the CDC now realize that the US will never reach the >80% herd immunity vax level due to significant anti-vax sentiment. Currently the United States has 77% rate at at least 1 vax shot, 66% full vaccination, and 30% for at least one booster. By contrast, Mainland China is 91%, 89%, 50% respectively but with IMO poorer quality vaccines (and data). Hence, China’s desire / need to ABSOLUTELY try to stop ANY Covid variant, especially a highly contagious one, from entering and then rapidly spreading through any population center, province, or country. A surge like the US experienced over the last 8 months would expose China’s Covid vulnerability. IMO.

    3
    April 12, 2022
    • Robert Stack said:
      Bart: You correctly cite large differences in the efficacy rates of the various vaccines (mRNA vs inactivated virus) that are grounded in real science. This is a nuance many do not understand, let alone the repercussions of not understanding. Then there’s the oft-asked question: “But if I’ve been vaccinated once (or even twice) already, why do I need a booster? Or god forbid a second booster?” Meaning far too many people know far too little about how the immune system works either. Sigh…

      Joe: “The reality is that the lockdown bought the country enough time to develop truly meaningful vaccines. THAT is the difference between the US and China; we no longer need to rely heavily on lockdown.” Spot on Joe, spot on!

      4
      April 12, 2022

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