Worker exodus, Covid-19 lockdown in world’s largest iPhone factory hit Apple supply chain in China
- An unknown number of workers have fled the iPhone production plant run by Foxconn Technology Group in Zhengzhou as Covid-19 cases flare
- At least 10 per cent of the global iPhone production capacity is affected by the situation in the Zhengzhou campus, one analyst said
An exodus of panicked workers, fearing Covid-19 lockdowns and infections in the world’s largest iPhone factory in the central Chinese city of Zhengzhou, could slow the production of Apple’s flagship device in the coming months.
The factory in the capital of Henan province employs around 300,000 workers. Neither Foxconn, also known as Hon Hai Technology Group, nor the Zhengzhou government has disclosed how many workers are leaving or are in quarantine.
Foxconn has set up seven pickup points for workers leaving the campus, according to the company’s latest notice. Local authorities in other cities in Henan, where many Foxconn workers come from, have also rushed to arrange coaches to take people home.
A driver from the city of Jiaozuo, which borders Zhengzhou and makes up 3.5 per cent of Henan’s population, said the city has arranged four buses to shuttle between Foxconn and a local quarantine and reception centre. Another driver said three more buses were added on Sunday, taking back around 400 workers.
Henan Daily, a local official newspaper, quoted an unidentified person in charge of the Foxconn unit responsible for assembling the iPhone 14 series, saying that the plant is in desperate need for workers to support the current peak production season and has pleaded for support from factories in other parts of China.
Reuters on Monday cited an unidentified source “with direct knowledge of the matter” saying that Foxconn’s Zhengzhou plant could see its iPhone output hit by “up to 30 per cent” in November and the company is trying to mitigate the impact by shifting some orders to its plants in the southern city of Shenzhen.
At least 10 per cent of the global iPhone production capacity is affected by the situation in Foxconn’s Zhengzhou factory, Kuo Ming-chi, an analyst at TF International Securities who follows Apple’s supply chain, wrote on Twitter on Sunday.
However, the incident has not changed his current forecast of iPhone shipments, he said, adding that he believes Foxconn’s production capacity “will gradually improve within a few weeks” with “limited impact” on iPhone shipments in the fourth quarter.
Apple did not immediately respond to a request for comment.
Since Monday, the Foxconn compound in Zhengzhou has gradually resumed services in dining halls, although employees are banned from sitting face-to-face.
The company also told employees on Sunday that the factory would “return to order” in four to five days, and workers who clock in every day would get bonuses, according to a report by Xinhuanghe, a media outlet under the state-run Jinan Daily News Group.
Foxconn has denied rumours that a large number of workers had contracted Covid-19, saying on Wednesday that there had been a small outbreak at the plant and the impact on operations was “controllable”.
Henan health authorities reported six confirmed cases with symptoms on Sunday, five of them located in Zhengzhou. Among 36 asymptomatic cases recorded, 35 were from Zhengzhou.