By Yimou Lee
TAIPEI (Reuters) – Apple Inc’s iPhone output could fall 30% at one of the world’s largest factories next month due to tightening COVID-19 restrictions in China, a user with direct knowledge of the matter said on Monday.
Foxconn, formerly Hon Hai Precision Industry Co Ltd, is bidding to ramp up production at some other plant in the city of Shenzhen to make up the shortfall, said the user, who declined to be known because the data is private.
Its main factory in Zhengzhou, central China, which employs about 200,000 people, has been rocked by discontent with strict measures to curb the spread of COVID-19, with several employees fleeing over the weekend.
The imaginable impact on production comes during a historically busy era for electronics makers ahead of the holiday season, which is also a prime time for suppliers like Apple.
Foxconn said Sunday it was within the situation and would coordinate backup production with other factories to reduce any potential impact. Its percentage value closed down 1. 4% on Monday versus a 1. 3% increase in the overall market.
Apple responded to a request for comment.
Foxconn is Apple’s largest iPhone maker and generates 70 percent of the world’s iPhone shipments, accounting for forty-five percent of the Taiwanese company’s revenue, analysts at Taipei-based Fubon Research said this month.
It also builds the device in India, but its factory in Zhengzhou assembles most of its production.
A user familiar with the scenario said much of the staff had stayed at the Zhengzhou factory and production was continuing.
STRICT MEASURES AGAINST COVID-19
Under China’s ultra-strict zero-COVID-19 policies, localities will have to act temporarily to quell outbreaks, with measures adding large-scale lockdowns.
Factories in affected spaces can remain open as long as they operate in a “closed loop” formula where staff live and paint on site. Companies have stated that such arrangements pose many difficulties.
Foxconn banned food in the dining halls of the Zhengzhou factory on Oct. 19 and forced staff to eat food in dormitories. He said production is normal.
The measures prompted others who said they worked at the site to express frustration at his treatment and willingness via social media.
Dozens of others fled the site over the weekend, with photographs and videos on social media claiming to show Foxconn staff crossing fields during the day and along roads at night. It may not take long for Reuters to determine the authenticity of the messages.
Foxconn did not disclose whether staff at the Zhengzhou site had been diagnosed with COVID-19. Since October 19, the government reported 264 cases of COVID-19 transmission in Zhengzhou, the capital of central Henan province.
Foxconn implemented closed-loop measures in March and July this year at its small factory in Shenzhen, while rising in the southern city.
In May, the Shanghai plant of another Apple supplier, MacBook assembler Quanta Computer Inc, also went through labor chaos after COVID-19 cases were detected despite a closed-loop formula being established.
(This story has been reclassified to correct type the name indicating that the figure applies to the production of a single plant)
(Reporting via Yimou Lee; Additional reporting via Brenda Goh; Editing through Gerry Doyle and Christopher Cushing)
British Prime Minister Rishi Sunak congratulates Lula on Brazil’s election victory
Seoul arrives in Itaewon nightlife district about to be renovated