Power disruptions at manufacturing plants located in China could prove to be a supply-side risk for Apple Inc. AAPL.
According to TFI Securities analyst Ming-Chi Kuo, the temporary power outage in the southwestern Sichuan province on Monday may affect iPad assembly plants of Hon Hai Precision Industry Co. Ltd. HNHPF in Chengdu and Compal in Chongqing.
Although difficult to assess at this point, the impact should be limited if the power outage can end by Aug. 20, he said via Twitter.
The analyst also sees mitigating impact from flexible production scheduling by assemblers.
Ku warned that if such a situation recurs in the next few months, it can affect Apple’s new product shipments during the peak season.
Apple is heavily reliant on China for sourcing supplies for its hardware and for assembling. Given the risk involved in the concentration of Cupertino’s supply chain in China, Apple has recently undertaken several measures to diversify its sourcing and assembling.
Apple closed Monday’s session 0.63% higher at $173.19, according to Benzinga Pro data.
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