A person with direct knowledge of the situation said on Monday that COVID-19 problems at Foxconn’s iPhone assembly plant in China’s Zhengzhou city could reduce the site’s November output of the Apple Inc. device by as much as 30%.
The person, who asked to remain anonymous because the information was private, stated that Foxconn, formerly Hon Hai Precision Industry Co Ltd, is working to increase production at its factory in Shenzhen city to make up for the shortfall.
A number of employees fled the facility over the weekend as a result of the strict measures put in place to stop the spread of COVID-19 within the Zhengzhou plant in central China, which employs about 200,000 people.
The potential production impact comes amid a typically busy period for electronics manufacturers before the year-end holiday season, which is also a crucial time for vendors like Apple.
On Sunday, Foxconn declared that the situation was under control and that it would coordinate backup production with other plants to lessen any potential effects. On Monday, its stock price declined 1.9% while the overall market rose 1.1%.
No comment in this regards was available from Apple.
According to analysts at Taipei-based Fubon Research, Foxconn is Apple’s top iPhone manufacturer, responsible for 70% of all global iPhone shipments and 45% of the Taiwanese company’s revenue.
Although it also manufactures the device in southern China and India, the majority of its production worldwide is put together at the Zhengzhou factory.
Numerous employees were still present at the Zhengzhou plant, according to a second person with knowledge of the situation, and production was still underway.
Localities are required to take immediate action to contain outbreaks under China’s extremely strict zero-COVID-19 policies, including full-scale lockdowns.
Factories in impacted areas are frequently permitted to remain open as long as they employ a “closed loop” system where employees live and work on-site. Businesses claim that these arrangements present a number of challenges.
On October 19, Foxconn prohibited eating in the plant’s canteens in Zhengzhou and mandated that staff members take their meals in the dormitories. Production was described as usual.
People who claimed to work at the location expressed their annoyance with the measures and their treatment and amenities on social media as a result of the measures.
Numerous people left the site over the weekend, and images and videos posted on social media purport to show Foxconn employees walking through fields during the day and along roads at night. The authenticity of the posts could not immediately be confirmed by Reuters.
The number of infected employees at the location has not been disclosed by Foxconn or the local government. Since October 19, 264 locally transmitted COVID-19 cases have been reported from Zhengzhou, the provincial capital of central Henan.
At its smaller Shenzhen factory, Foxconn implemented closed loop controls in March and July of this year as cases in the southern city increased.
Despite having a closed-loop system in place, in May, the Shanghai facility of another Apple supplier, MacBook assembler Quanta Computer Inc., was also plagued by worker unrest following the discovery of COVID-19 cases.
(Adapted from Reuters.com)