Covid at Chinese plant will hit iPhone production, says Apple

An outbreak of Covid-19 at the world’s largest iPhone plant in China is likely to lead to ‘significantly reduced’ production before Christmas.

Apple has acknowledged that an outbreak of Covid-19 at the world’s largest iPhone plant in China is likely to lead to “significantly reduced” production of its iPhone 14 Pro and iPhone 14 Pro Max models in the run-up to Christmas.

The admission by Apple came one week after an exodus of workers over fears of coronavirus at the Foxconn factory, which makes the new high-end iPhone models, in the central Chinese city of Zhengzhou.

“The facility is currently operating at significantly reduced capacity,” the US company said. “We now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated. Customers will experience longer wait times to receive their new products.”

The statement was the first time Apple acknowledged the production problem in Zhengzhou and contradicted an earlier Foxconn statement that production remained stable. It was consistent with accounts by Foxconn workers that a large number had left the plant or did not report to work, despite a quadrupled daily retention bonus.

China is battling a surge of Covid-19 infections, with daily cases reaching 5496 on Monday, a new high since May. Citing the “complex” situation, national health officials over the weekend reaffirmed the country’s adherence to the zero-Covid policy, dampening hopes that China might be on the verge of reopening its economy.

A file photo shows Chinese workers in a Foxconn factory in Shenzhen, in southern China. Picture: AFP

Foxconn’s Zhengzhou factory, which employs 200,000 workers and makes at least half of the iPhones globally, last month asked its workers to move into the factory compound in an attempt to ensure uninterrupted production by isolating the factory from the city at large. This means they are not allowed to leave the compound.

A large number of workers instead fled the factory on foot, despite the offer of a bonus that had quadrupled to almost £50 ($89) a day.

One worker told state media last week that daily production had dropped from 36,000 units to 20,000 in his workshop. Another worker said his assembly line, which normally has more than 50 workers, had only a dozen at the end of October. After that, he left the factory too.

Analysts say Foxconn, which has more than 40 plants throughout China, can move the production of iPhones from the Zhengzhou factory to other facilities. However, they are not equipped to make the new models. It is believed that as many as 85 per cent of the iPhone 14 Pros are made in Foxconn’s Zhengzhou plant.

Foxconn said it was revising its outlook for this quarter downward due to the lockdown, adding: “Foxconn is now working with the government in a concerted effort to stamp out the pandemic and resume production to its full capacity as quickly as possible.”

Demand for high-end smartphones made at the factory has helped Apple avoid the downturn that has affected other tech companies as consumers cut their spending because of rising inflation and higher interest rates.

The Times