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Apple continues to fall short of holiday production targets, citing supply chain restrictions and power regulations in China — but the problems likely started well before the pandemic.
At a time when Apple suppliers typically start ramping up production to meet holiday demand, most have cut or halted production. Employees who often see overtime instead were given time off.
Nikkei Asia released a new report showing how lingering supply chain bottlenecks and power restrictions in China have forced Foxconn, Pegatron and other Apple suppliers to produce less, not more.
“Because of the limited components and chips, there was no point in working overtime on holidays and giving extra wages to frontline workers,” said a supply chain manager. Nikkei Asia.
“That’s never happened before. The Chinese golden holiday in the past was always the most hectic time when all the mechanics were getting ready for production.”
Nikkei Asia interviewed nearly two dozen industry executives in hopes of summarizing the story. As it turned out, the pandemic was only part of the story.
Reporters also found out that Apple had done its best to fix problems. The company has reassigned key essentials from the iPhone 12, iPhone SE and iPads to the iPhone 13 lineup.
However, production of the iPhone 13 lagged 20% behind Apple’s target.
Due to the allocated resources, iPad production was only half of what was planned. Production of previous generations of iPhones fell by 25%, multiple sources said Nikkei Asia.
Bloomberg recently reported that Apple told suppliers that production targets could be lowered even further as demand for the iPhone 13 has slowed.
However, the article states that this is not true. According to one of Nikkei AsiaApple constantly assured them that demand has remained high and orders have been delayed due to supply constraints.