iPhone Production Suspended In Shenzhen Due To COVID-19 Lockdown

Apple Inc. AAPL supplier Hon Hai Precision Industry Co. Ltd. HNHPF has halted production of iPhones at its site in the Chinese tech hub of Shenzhen due to a government-imposed COVID-19 lockdown, Bloomberg reported Sunday.

What Happened: Hon Hai, better known as Foxconn, has suspended operations at its China headquarters as well as a key manufacturing site in the tech hub city of Shenzhen and reallocated production to other sites to minimize the impact of disruption, as per the report.

See Also: How To Buy Foxconn Stock

Why It Matters: The Chinese government on Sunday placed Shenzhen into lockdown for at least a week amid a surge in COVID-19 infections since late February. Non-essential businesses in the city have been ordered to halt operations until March 20.

The move comes as new locally transmitted cases in China surged to more than 3,100 on Sunday after topping 1,000 for two days in a row, the South China Morning Post reported.

Shenzhen — a city of 17.5 million people that links Hong Kong to China’s mainland — is also the headquarters of Chinese companies such as Tencent Holdings Limited TCEHY, telecom equipment maker Huawei Technologies Co. and electric car brand BYD Auto.

The disruption due to the lockdown comes just a month after Foxconn hinted at an improvement in the supply chain after production was impacted due to chip shortages. The Taiwan-based company is a leading assembler of iPhones.

Price Action: Apple shares closed 2.4% lower in Friday’s regular trading session at $154.73 and further lost almost 0.2% in the after-hours session to $154.44.

Read Next: Norway's Central Bank Reduced Exposure To Apple While Buying Up Nvidia

Photo: Courtesy of Apple