Foxconn Covid woes may hit iPhone

Amid a lockdown triggered by the Covid outbreak, Foxconn is distressed after reporting that several workers have fled the Zhengzhou plant, an iPhone manufacturing facility in central China, over the weekend.

On October 19, Foxconn banned dining at canteens at the Zhengzhou plant, requiring workers to eat in their dormitories. Said measures frustrated the workers, which led to them venting their resentments on social media.

According to BBC’s correspondent in China, Stephen McDonell, “Workers have broken out of Apple’s largest assembly site, escaping the Zero Covid lockdown at Foxconn in Zhengzhou. After sneaking out, they’re walking to hometowns more than 100 kilometers away to beat the Covid app measures designed to control people and stop this. China,”

Thousands of Apple’s components from Europe to Asia are being shipped and manually assembled in Zhengzhou before being dispersed to the rest of the world. This is why such disruption is a threat to Apple’s supply chain.

This Foxconn gloom may cut iPhone’s November output by 30%. The predicted impact on production emerged amid the upcoming year-end holiday season when electronics makers are traditionally busy and are also a prime time for Apple vendors.

Foxconn’s response

On Sunday, Foxconn stated that they were putting the situation under control through coordinated backup production with other plants.

According to a private source, Foxconn is trying to make up for its shortcoming by boosting production at its factory in Shenzhen City. Said response is expected to reduce the incident’s potential impact.

Despite this, Foxconn’s share price fell 1.9 percent on Monday. Apple, on the other hand, did not give any comment.

According to an analyst at Taipei-based Fubon research, Foxconn is Apple’s biggest iPhone maker, producing 70% of iPhone shipments globally which in turn makes up 45% of the Taiwanese firm’s revenue.

Although Apple also has similar facilities in southern China and India, the Zhengzhou factory is still responsible for the majority of its global output.

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