Foxconn Adjust iPhone Production Factory

Foxconn Adjust iPhone Production Factory

Apple supplier Foxconn said it will do everything in its power to meet its order book, after the world’s largest iPhone factory shuttered.

Earlier this month, Foxconn’s main iPhone factory in Zhengzhou, which employs about 200,000 workers and is sometimes referred to as “iPhone City”, It was kept in a closed position for seven days.

The Chinese authorities made the decision to close the entire area after the Taiwanese company did so Try to control the spread of covid In the largest iPhone factory in the world.

Foxconn factory in Shenzhen, China. Image credit: Steve Jurvetson

Factory insurance

Before the shutdown, local reports indicated that large numbers of workers at the Zhengzhou factory had fled the site, where coronavirus cases had risen, due to fears of a closure or an outbreak of Covid-19.

That same shutdown lasted until Wednesday, November 9, but Apple this week Warn customers of longer waiting times for new iPhones As the shutdown was affected by shipments of the latest generation of the device, Submitted in September.

“We continue to see strong demand for the iPhone 14 Pro and iPhone 14 Pro Max models,” Apple said in a statement earlier this week.

“However, we now expect iPhone 14 Pro and iPhone 14 Pro Max shipments to be lower than we previously expected and customers will experience longer wait times to receive their new products.”

The company added that it “prioritizes the health and safety of workers in our supply chain,” adding that it “works closely with our suppliers to return to normal production levels while ensuring the health and safety of every worker.”

The last quarter of the year is prime time for iPhone shipments, due to holiday demand.

UBS analysts said over the weekend that Apple is expected to manufacture about 41 million iPhones during this period. But closing the plant could affect that target by a few million units.

About 60 percent of Foxconn’s iPhone assembly takes place in the Zhengzhou complex, Morgan Stanley estimated in a report last week.

closed loop production

Currently Reuters reported Foxconn said Thursday it is adjusting production to prevent recent Covid-19 restrictions at a massive iPhone factory in China from affecting holiday orders.

Speaking on the earnings call, Chairman Liu Yong-wai reportedly said that the Christmas and Lunar New Year holidays are “very important.”

“We will definitely do everything we can to adjust our production capacity and production, so there will be no impact on demand in these two holidays,” Liu said. He did not give details.

He added that the cost impact of Covid controls, including providing bonuses for retaining workers, would be short-lived, and that Foxconn was working with the government to resume normal production as soon as possible.

On Wednesday, Foxconn said it would continue production in Zhengzhou under a “closed-loop” system, where employees live and work on-site in a bubble cut off from the wider world.

There are fears that if disruption continues, it could hamper Foxconn’s ability to ship iPhones in what is traditionally the peak season for Taiwanese tech companies as they race to supply smartphones and other electronics for the year-end holiday period in Western markets followed by Lunar New Year in East Asia.

Production transfer?

When asked if customers are pushing to spread production to other Chinese cities or outside of China, Liu said geopolitics is more likely to play a role in restructuring Foxconn’s production footprint than the pandemic.

“Of course there may be other factors that require a reconfiguration of production capacity, such as geopolitics,” Liu said.

Foxconn accounts for 70 percent of iPhone shipments globally, and Apple this week lowered its forecast for shipments of premium iPhone 14 models.

It must be remembered that Apple’s production has already been disrupted by China’s strict no-Covid policies during the epidemic, which this year resulted in Two months insurance in Shanghai And intermittent closures in other cities.

In September this year, Apple announced that it had done so It started manufacturing some of its iPhone 14 phones in India.

He also recently added a file Manufacturer II (Pegatron)which will start making iPhone 14 phones in India.

The move came as manufacturers explore alternative production sources away from China, amid ongoing geopolitical tensions with Western countries, along with their strict pandemic restrictions that have disrupted supply chains for many industries.

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