China has recently doubled down on its zero-Covid policy in Shanghai where dozens of factories have been disrupted from assembling electronic products for many companies, including Apple and Texas Instruments.
Authorities in Shanghai appear to have walked back efforts to ease restrictions in part of the city, CNN reported Monday, based on videos surfaced over the weekend of residents scuffling with workers wearing hazmat suits.
The zero-Covid policies, enacted from the top by President Xi Jinping, have led to closures or partial shutdowns of hundreds of electronics assembly plants in eastern China over the past few weeks but have hit Shanghai especially hard.
Texas Instruments recently lowered its revenue projection for the current quarter by 10% due to factory shutdowns in China because of Covid-19 restrictions. “Dozens if not hundreds of factories are shut…with restrictions beyond Shanghai,” TI CFO Rafael Lizardi said April 26.
TI has not been able to get shipping companies to agree to ship products into China because of the shutdowns, he said.
RELATED: TI cuts revenue outlook 10% over Covid shutdowns at China factories
Also last month, Apple said Covid-19 in China threatened to reduce sales by up to $8 billion in the current quarter due to Covid-control measures. The majority of Apple products are assembled or partially fabricated at plants in China including Foxconn and Pegatron.
In Shanghai alone, 31 companies run production facilities that supply components to apple, according to supplier list from Apple acquired by the Wall Street Journal.
“Supply constraints caused by Covid-related disruptions and industrywide silicon shortages are impacting our ability to meet customer demand for our products,” Apple CFO Luca Maestri said during a conference call April 28.
Apple has reacted to China shutdowns since the start of the pandemic by sending fewer U.S. based engineers to the country to oversee contract manufacturers, the news outlet reported, citing unnamed sources. Apple staff in Cupertino, Calif., use live-streaming to follow activities on factory floors in China while also relying on local engineers.