Malcolm Owen
Foxconn's COVID-19 outbreak in a major iPhone factory could impact production by up to 30%, but the assembly partner is attempting to use other facilities to keep production up.
The Zhengzhou factory in China's Henan province was hit by a Coronavirus outbreak in October, which threatened production at Foxconn's biggest site for assembling iPhones. While Foxconn is attempting to mitigate any shortfall, it seems the hit to global iPhone could be significant.
A person familiar with the issue told Reuters on Monday that the impact of reduced production could cut supplies by as much as 30%. To work around the slump in production, Foxconn is said by the source to be increasing activity in Shenzhen city.
The report correlates with tweets from analyst Ming-Chi Kuo on Sunday, who said that the outbreak has forced Foxconn to delay a seasonal reduction in production.
The facility has also quickly and suddenly adopted closed-loop production, keeping workers in dormitories to minimize contact with the outside world. Just the shift to closed-loop caused a reduction of more than 10% of capacity, Kuo offered.
Initiatives at the factory to minimize spread include an October 19 ban on dining at canteens, with workers instead forced to eat meals within the dorms.
The measures prompted workers to vent on social media, as well as claims scores of workers fled the factory. Videos on Chinese social media reported by the Washintgton Post show workers climbing fences and carrying belongings as they depart the factory. While the videos aren't all verified as accurate, it is also unclear if the workers were permitted to leave or if they were escaping.
As the producer of 70% of the world's iPhones, the factory produces the majority of iPhone output, making such issues a major problem for both Foxconn and Apple. The period is also traditionally busy, due to the year-end holiday sales, so any drop in production could have a big impact overall.
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7 Comments
Kinda reads like "thoughts and prayers for those lost iPhones."
With employees now escaping the plant his out break could spread to a whole province. I don’t blame them on bit. Another sign Apple is to dependent on China., should atleast bring some IPhone manufacturing to Americas.
That's what happens when you decide it's 'cheaper' to build products in a fascist state.
Apple chose to contract there for price reasons. It could have built factories wherever it wanted, but chose to outsource. It did this to maximise margins, the highest in the business, multiples of its competing computer hardware companies. It could halve its margins and they would still be multiples of the likes of Dell. That would give it a bit of room to build factories anywhere it wanted. But that was not the business decision it made back in the day when Apple was always referred to as “beleagured Apple Computer” . Back then it did not have the choices it has now. But now it does have choices, but building elsewhere would hit margins.
anyway, some fun COVID facts.
According to worldometer, out of a population of 1.54 billion people, only 260,000 people have contracted the couf and not yet 5300 deaths.
that Ranks China as number 107 out of reporting 230 reporting sources.
One would be tempted to make observations about the efficacy of the vaccine, but the true, real story here is about the reliability of statistics in a fascist country. They are just not credible. The Chinese people would know this, but they have no choice but to accept it. That is the true problem in a country where the state has more rights than the individual.