Production at Apple supplier Foxconn in Shenzhen is temporarily halted due to a Covid-19 outbreak.

• After a surge in Covid-19 cases, Shenzhen, a Chinese manufacturing hub, has shut down again, prompting Foxconn, a significant iPhone assembler, to halt operations.
• Based on case numbers, officials plan to reassess restrictions in a week.
• A Bank of America research note from Monday states that nearly half of cell phone production occurs at a factory in Henan province.

After a surge in Covid-19 cases, Shenzhen, a Chinese manufacturing hub, has shut down again, prompting Foxconn, a major iPhone assembler, to pause its operations in the city.

Foxconn's operation in Shenzhen, China has been suspended from March 14 in accordance with the new COVID-19 policy, and the date of factory resumption is yet to be determined by the local government.

Apple’s stock closed down 2.66% on Monday.

Apple's latest product lineup, which includes a budget iPhone, was released just before the shutdown.

Foxconn has adjusted its production line to minimize potential impact due to its diversified production sites in China, as stated in a CNBC report.

While Foxconn produces some iPhones, iPads, and Macs in Shenzhen, nearly half of iPhones are manufactured at a factory in Henan province, according to a Bank of America research note. As a result, Apple can increase production in Henan province to recover some of its losses.

If there is no significantly longer lockdown duration, Apple/Foxconn can relocate production to other areas in the short term, but an increased shutdown period can cause ripple effects and lead to a production shortfall.

The analysts stated that they will not reduce their estimates at present, but they are still concerned about any potential "long-term supply effects."

Apple was not immediately available to comment.

The Wall Street Journal first reported the news.

CNBC’s Sam Shead contributed to this report.