Foxconn, Apple’s chief iPhone assembler, is moving operations to other parts of China to deal with a growing COVID outbreak, a move that could drastically cut back on production.
According to multiple media reports Monday (Oct. 31), the company is bussing workers from its plant in Zhengzhou.
“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 Sunday.
Meanwhile, a source with knowledge of the situation told Reuters that production of iPhones could fall by 30% next month due to the move. In a report by the Financial Times, Ming-chi Kuo, an analyst at TF International Securities, estimated that the outbreak affected “more than 10 percent of global iPhone production capacity.”
However, Kuo said the shutdown hadn’t impacted forecasts for iPhone shipments this quarter, and he expected production capacity to improve within weeks.
Apple was not immediately available for comment Monday.
The news comes a little more than two months after reports that Apple was moving some of its iPhone 14 production to India with the goal of shortening the production time for new phone releases from nine months down to six.
The Silicon Valley tech giant has relied on China to manufacture its smartphones since they first appeared 15 years ago. The company is now seeking alternatives because of Chinese President Xi Jinping’s attitude toward U.S. businesses.
And although the popularity of the iPhone had diminished somewhat in China, Apple has a ripe consumer base thanks to India’s 1.4 billion people. In addition, Indian Prime Minister Narendra Damodardas Modi has offered financial incentives for tech production under the country’s Make in India program.
In May, Apple ordered suppliers to speed up the pace of iPhone developments due to China’s tough COVID lockdown protocols. This demand came after the country’s zero-COVID policy led iPhone assembler Pegatron to suspend operations at its plants in Shanghai and Kusha.
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