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TrendForce has corrected its Q422 projection on the total shipments of Apple Inc (NASDAQ: AAPL) iPhone 14 models in 2022 to 78.1 million units, slightly up from the previous 78 million.
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The revision reflected the Covid outbreak hampering the operation of Hon Hai Precision Industry Co Ltd (OTC: HNHPF) Foxconn’s primary manufacturing base in the Chinese city of Zhengzhou.
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As a result, the capacity utilization rate of the base has yet to rise above 70%.
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Also Read: Here’s How Apple’s Crucial Partner Influenced China’s Relaxation Of Covid Policies
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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.
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Furthermore, the new Pro models have been in high demand, so Apple has kept raising its share in the overall iPhone production.
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Hence, Foxconn, as the sole assembler of the new Pro models, has been under significant strain.
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Besides the Zhengzhou base, Foxconn also pulled support from its other significant base in Shenzhen.
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Apple decided to employ Luxshare as one of the upcoming iPhone 15 Pro Max assemblers.
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However, Luxshare’s only iPhone assembly plant is located in China.
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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.
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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.
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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.
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Therefore, Apple will need to keep raising its share of device production in these two countries over the next several years.
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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.
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TrendForce corrected its forecast of iPhone shipments in 1Q23 to 47 million units, down from the prior 52 million.
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Price Action: AAPL shares traded lower by 0.30% at $129.66 on the last check Wednesday.
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