China is facing its worst heatwave in 60 years. In addition to that, iPad assembly plants in the region are now facing delays in production due to power outages, according to TF Securities analyst Ming-Chi Kuo. The power outages could not have come at a worse time for Apple as the tech giant is expected to announce new iPad models in October.
iPad production at Foxconn and Compal seeing delays prior to the expected launch of new models
Reuters first reported that “Industrial users across 19 out of 21 cities in the province were ordered to suspend production from Aug. 15 until Aug. 20 to prioritise residential power supply,” according to a notice issued by the Department of Economy and Information Technology of Sichuan.
Susan Zou, an analyst at Rystad Energy told Reuters, “This will definitely give a boost to lithium prices especially when the dynamics of EV (electric vehicle) sales in China look promising during the reminder of this year,” and since “the high temperature in Sichuan province is not easing significantly next week, the supply chain is also wary of extended power restriction in the region.”
Later Ming-Chi Kuo in a tweet revealed that the power outage in Sichuan could impact iPad production at Foxconn and Compal’s plants.
Although its difficult to assess impacts on production currently, impacts should be limited if the power outage can end on August 20. In addition, flexible production scheduling by assemblers should also help lower the impact of power outages.
The analyst went on to say that flexible production should help lessen the impact of the power outages on iPad production. But, if similar incidents occur in the near future, the tech giant’s shipments could be affected.
In addition, flexible production scheduling by assemblers should also help lower the impact of power outages. However, need to pay attention to whether similar incidents will occur again in the next few months and affect Apple’s new product shipments during the peak season.
The Cupertino tech giant is expected to release two new iPad models at an event in October, an iPad Pro refresh with the M2 chip as well as the 10th-generation entry-level iPad with a larger display.