There are indications that Apple could review downwards its production targets due to COVID-19 curbs affecting its China operations. Sources point to a possible decline of up to 30% at one of the world’s biggest factories in Zhengzhou next month. The impact of the slump is however being mitigated by Foxconn in boosting production at another facility in Shenzhen.

The Foxconn Zhengzhou plant has over 200,000 workers but has endured some stringent measures aimed at curbing the spread of COVID-19. This led to several workers fleeing the site a few days back. This comes at a time when demand for electronics is traditionally on an upward swing. Foxconn in an official statement on October 30, said it was bringing the situation under control. It also says it will coordinate backup production with other plants to reduce any potentially damaging impact.

As of this moment, Apple has not made any official statement on the issue. Foxconn is Apple’s biggest iPhone vendor and its share price declined by 1.4% at the close on Monday. Foxconn accounts for up to 70% of global iPhone shipments annually. Foxconn’s iPhone production accounts for up to 45% of the overall revenue of the Taiwanese manufacturer. Foxconn has production facilities in India but the Zhengzhou plant is its largest.

Although production continues in the plant, it is under strict COVID-19 protocols put in place to quell any major outbreak.
The measures in place in the factory include full-scale lockdowns. Even when factories in such areas are allowed to be open, they must operate under a closed-loop system that prevents workers from their regular work routines, as they must live in the facility. The company also banned dining inside canteens as workers were expected to eat in their dormitories. These heavy measures resulted in some workers allegedly fleeing from the facility.

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(source)

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