While the Apple iPhone 14 series is still months away from launch, the company’s next gen iPhone lineup might already be seeing issues in its production after one of the brand’s major suppliers halts hiring following lockdowns in China.

For those unaware, the Cupertino based giant is trying to ensure proper supply of its iPhone 14 series to avoid any delays or issues in inventory that had plagued the iPhone 13 and iPhone 12 lineup previously. Thus, in line with its efforts, Foxconn had announced that it would be hiring additional workings and bumping incentives to make sure that the production of current gen and next gen iPhone stays consistent.

But just a day after this announcement was made, the major Apple supplier had to halt hiring for its plant in Zhengzhou, China after the region saw new lockdowns and restrictions being imposed. In other words, this would likely also lead to complications for the production of iPhone 14 series that is set to launch in the fall season of this year. According to an SCMP report, Foxconn is suspending new hires for line workers and is running its production in a closed loop system that has its employees stay within the campus.

As of right now, this is not expected to impact Apple’s iPhone 14 lineup in manner similar to the iPhone 12, who’s launch was delayed till October 2020. But, it appears that the brand might same the same supply constraint issues like last year’s iPhone 13. Meanwhile, the company’s overall supply chain seems to be improving as Quanta, the sole MacBook Pro supplier is set to resume production from its China plant as well following similar lockdowns.

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Even though the supply chain situation that affected Apple terribly has improved significantly, there can still be a hindrance to the iPhone 13 lineup’s production in Q4 2021, believes JP Morgan. Analyst Samik Chatterjee states that it has become a concern for Apple to look at supply constraints with the imminent Covid-19 resurgence and a terrible hit to production due to recent power usage restrictions in China.

The JP Morgan analyst notes the production ramping up process on iPhone 13 lineup is moving forward at a slower pace than it was on earlier iPhones and the main bottleneck behind this is the camera module issues.

While Covid cases and multiple restrictions have contributed to the sluggish production in Vietnam, the root cause revolves around the supplier ramp of sensor-shift optical image stabilization. But the situation will improve as restrictions will be relaxed and LG Innotek’s camera facility along with a secondary unit in South Korea is set to boost the production at a pace that is required.

There are more issues hovering over iPhone 13 supply as smaller components may be terribly impacted if the power shortage issues in China persist. However, larger components are out of trouble for now so that’s good news. The analyst believes 5-10 million units out of the 143 million planned units could be affected due to this. But despite that, Apple continues to stay in a comfortable position in terms of sales.

The analyst maintains his Apple price target of $180, based on a price-to-earnings multiple of 28x on JP Morgan’s 2023 earnings estimate of $6.55.

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