- TrendForce has corrected its Q422 projection on the total shipments of Apple Inc AAPL iPhone 14 models in 2022 to 78.1 million units, slightly up from the previous 78 million.
- The revision reflected the Covid outbreak hampering the operation of Hon Hai Precision Industry Co Ltd HNHPF Foxconn's primary manufacturing base in the Chinese city of Zhengzhou.
- As a result, the capacity utilization rate of the base has yet to rise above 70%.
- Also Read: Here's How Apple's Crucial Partner Influenced China's Relaxation Of Covid Policies
- The outbreak in Zhengzhou reached its height as Apple struggled to ramp up sales of the new iPhone models for this year to a peak.
- Furthermore, the new Pro models have been in high demand, so Apple has kept raising its share in the overall iPhone production.
- Hence, Foxconn, as the sole assembler of the new Pro models, has been under significant strain.
- Besides the Zhengzhou base, Foxconn also pulled support from its other significant base in Shenzhen.
- Apple decided to employ Luxshare as one of the upcoming iPhone 15 Pro Max assemblers.
- However, Luxshare's only iPhone assembly plant is located in China.
- In Vietnam, Luxshare has a plant for assembling Apple-related accessories, but the company currently has no plan for setting up a new iPhone production line there.
- For 2023, Apple aims to double its device production capacity in India and have factories in Vietnam start making contributions by the middle of the year.
- TrendForce believes that at least 30~35% of Apple's total device production capacity will have to be located in Vietnam and India to dodge the escalating trade dispute between China and the U.S.
- Therefore, Apple will need to keep raising its share of device production in these two countries over the next several years.
- TrendForce further highlighted that China's supply chain has started to experience a labor crisis this December, likely to get worse due to government policy.
- TrendForce corrected its forecast of iPhone shipments in 1Q23 to 47 million units, down from the prior 52 million.
- Price Action: AAPL shares traded lower by 0.30% at $129.66 on the last check Wednesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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