Shipment term

Apple warns of iPhone shipping delays due to ‘significantly reduced capacity’ at Foxconn factory in Zhengzhou

The Covid-19 lockdown at Foxconn’s Zhengzhou factory will affect production and shipments of the iPhone 14 Pro and Pro Max lines for the upcoming holiday shopping season, Apple said in a statement, breaking its silence on the recent chaos. in the largest iPhone factory in the world. .

“The (Foxconn Zhengzhou) facility is currently operating at a significantly reduced capacity…we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated,” the company said. November 6.

Apple did not provide specific estimates of affected production at the complex, which employs nearly 300,000 workers and has been hit by Beijing’s draconian Covid-19 control measures. Apple’s statement contrasts with a Foxconn statement released 10 days ago confirming “a small number” of Covid infections at the factory, adding that production was relatively stable.

On Monday, Foxconn downgraded its outlook for its fourth quarter to “cautiously optimistic”, saying in a new statement that the pandemic has affected some of its operations in Zhengzhou.

The South China Morning Post reported on October 21 that Foxconn’s iPhone factory in Zhengzhou had imposed strict restrictions on the movement of workers within its compound, including the cancellation of meals served in canteens.

The situation spiraled out of control over the last weekend in October when tens of thousands of workers fled the compound for fear of catching the virus and complained of poor service. Foxconn responded by quadrupling its workers’ daily bonus to 400 yuan (RM261) if they stayed.

Ming-chi Kuo, an analyst at TF International Securities, estimated that the disruptions would reduce global iPhone production by around 10%.

Kuo noted that Foxconn had moved some production to its Shenzhen plant to mitigate the impact, and was discussing other arrangements with its contractors. Apple would also significantly increase its iPhone production in India, from 2-4% of current global production to almost half in the long term, according to Kuo.

Neither Foxconn nor the Zhengzhou municipal government has released a specific count of how many people have been infected at the facility.

According to two workers interviewed by the Post last Friday, the situation at the compound is far from normal, with the entire area going into lockdown for seven days starting Wednesday. One worker said some of his colleagues chose to sleep on the factory floor for fear of catching the virus if they returned to their dormitories, where the risk of infection is higher. – South China Morning Post