Apple supplier Foxconn freezes hiring of new workers for world’s largest iPhone factory in Zhengzhou amid citywide lockdown
- Foxconn, the world’s largest electronics contract manufacturer, on Wednesday froze its hiring of new assembly line workers in Zhengzhou until further notice
- Zhengzhou, which recorded four new Covid-19 cases and 10 new asymptomatic carriers, has imposed a citywide lockdown from Wednesday till next Tuesday
Zhengzhou, which recorded on Wednesday four new Covid-19 cases and 10 new asymptomatic carriers, is under lockdown from Wednesday till next Tuesday. During this period, employees of government organisations and companies in the city’s main districts will work from home, school lessons will move online, and people will only be allowed to leave and enter Zhengzhou under “necessary” circumstances.
Under pressure to meet production requirements for Apple’s upcoming iPhone 14 range of models, Foxconn’s Zhengzhou operation earlier this week planned to increase the cash bonus offered to new recruits to 8,500 yuan (US$1,286), up from the previous 6,500 yuan, according to a report on Tuesday by Taiwanese newspaper Economic Daily News.
The move to suspend the hiring of new assembly line workers could complicate the iPhone 14 production schedule of Foxconn, which has run its smartphone and components production in Zhengzhou under a “closed-loop” system that confines employees within its campus.
That system allows workers to move on a “point-to-point” basis between factories and their dormitories, according to posts that Foxconn’s Zhengzhou operation published on its WeChat account.
Foxconn on Wednesday said its Zhengzhou campus “has maintained production unchanged”, according to its statement to Reuters.
Foxconn’s plant inside the Zhengzhou Airport Economy Zone usually produces 60 to 80 per cent of the world’s iPhones, so there could be a big impact to Apple’s supply chain if that site encounters major problems, such as large-scale Covid-19 infections, according to Ivan Lam, a Hong Kong-based senior analyst at research firm Counterpoint.
Based on the company’s latest statement, Lam said the Covid-19 situation in its manufacturing complex in Zhengzhou seems to be under control at the moment. He indicated that Foxconn is “one of the most resilient electronics manufacturers in the world”, and has great support from the local government, which relies on its operations for economic growth.
Still, the main Covid-19-related disruption for Foxconn in Zhengzhou has been in logistics, according to Lam. He said it now takes more time to transport components and materials into the factory because logistics services providers must go through additional procedures, such as testing and disinfection.