Foxconn originally planned to gradually reduce iPhone production capacity from Nov-Dec to cope with the seasonality. After the Zhengzhou iPhone plants entered closed-loop production, the plan to reduce iPhone production capacity will postpone. More than 10% of global iPhone production capacity is currently affected as Foxconn's Zhengzhou iPhone plants suddenly entered closed-loop production without warning. his incident has not changed the current iPhone supply chain shipment forecast. It's expected that Foxconn's production capacity will gradually improve within a few weeks, and there should be a limited impact on the 4Q22 iPhone shipments.
Notably, Kuo says Apple is discussing the possibility of switching iPhone 14 production lines at Pegatron and Luxshare ICT to the iPhone 14 Pro. Luxshare could start shipping the Pro models early in the first quarter of 2023.
Although costs will rise, Kuo believes that suppliers in China should improve their closed-loop production efficiency with the goal of reaching the same output as normal.
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