Apple’s China supply chain tested as Covid hits iPhone assembler Foxconn
Apple’s main iPhone assembler Foxconn said it was preparing to shift production to other parts of China as masses of workers fled its main production hub to escape a worsening Covid outbreak.
Local officials from cities around the region on Monday continued to bus workers away from the Zhengzhou plant, where staff say the company has failed to provide adequate food and a safe working environment during Apple’s peak production period.
“With the current pandemic situation it is a protracted war to do a good job keeping more than 200,000 employees safe,” Foxconn said in a stock exchange filing on Sunday evening. Shares in Hon Hai Precision Industry, Foxconn’s Taiwan-listed entity, fell 1.4 per cent on Monday.
Analysts at Morgan Stanley said they were monitoring the situation with the fourth quarter “peak season for iPhone shipments”.
“Zhengzhou is one of Foxconn’s major production sites, particularly for iPhone assembly,” they said in a report, noting the factory complex represented about 60 per cent of Foxconn’s iPhone assembly capacity.
Authorities have locked down swaths of Zhengzhou in an attempt to control the city’s latest Covid outbreak. The city of more than 10mn on Monday reported 40 new Covid cases.
Foxconn and Apple did not immediately respond to requests for comment.
This story originally appeared on: Financial Times - Author:Gloria Li
