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iPhone Output At Top China Plant Could Fall 30% Due to Covid

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

A motorcyclist rides past the logo of Foxconn in Taipei
Taiwan-based Foxconn makes electric vehicles for Lordstown Motors Corp and has a contract to make Fisker Inc's second car model, PEAR. Photo: Reuters


Production of iPhones could fall by as much as 30% next month at one of Apple Inc’s biggest factories in the world as China tightens Covid-19 curbs.

A person with direct knowledge of the matter told Reuters that factory owner Foxconn is working to boost production at another factory in Shenzhen city to make up for the shortfall.

Its main Zhengzhou plant in central China, which employs about 200,000 people, has been rocked by unrest over stringent measures to curb the spread of Covid-19. Several workers reportedly fled the site over the weekend.


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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, analysts at Taipei-based Fubon Research said this month.

It also builds the device in India, but its Zhengzhou factory assembles the majority of its global output.

A second person familiar with the situation said many workers remained at the Zhengzhou plant and that production was continuing.

Apple did not respond to a request for comment.


Busy season for Apple

The possible impact on production comes amid a traditionally busy time for electronics makers ahead of the year-end holiday season, which is also a prime time for vendors such as Apple.

Foxconn on Sunday said it was bringing the situation under control and would coordinate back-up production with other plants to reduce any potential impact. Its share price closed down 1.4% on Monday versus a 1.3% rise in the broader market.

Under China’s ultra-strict zero-Covid policies, localities must act swiftly to quell outbreaks, with measures including full-scale lockdowns.

Factories in affected areas are often allowed to stay open on condition they operate under a “closed loop” system where staff live and work on-site. Businesses have said such arrangements pose numerous difficulties.


Zero-Covid measures in effect

Foxconn banned dining at canteens at the Zhengzhou plant on October 19 and required workers to eat meals in dormitories. It said production was normal.

The measures led to people who said they worked at the site venting frustration about their treatment and provisions via social media.

Scores fled the site over the weekend, with photographs and videos on social media purporting to show Foxconn staff trekking across fields in daytime and along roads at night. Reuters could not immediately verify the authenticity of the posts.

Foxconn has not disclosed whether any workers at the Zhengzhou site had been diagnosed with COVID-19. Authorities have since Oct. 19 reported 264 locally transmitted COVID-19 cases in Zhengzhou, the capital of central Henan province.

Foxconn implemented closed loop measures in March and July this year at its smaller Shenzhen factory as cases in the southern city rose.

In May, the Shanghai plant of another Apple supplier, MacBook assembler Quanta Computer Inc, was also hit by worker chaos after the discovery of COVID-19 cases despite a closed-loop system being put in place.


  • Reuters, with additional editing from Vishakha Saxena


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Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]


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