Exclusive Foxconn COVID woes could affect up to 30% of November iPhone shipments from Zhengzhou factory

© Reuters. FILE PHOTO: The logo of Foxconn, the trading name of Hon Hai Precision Industry, is seen on top of the company’s building in Taipei, Taiwan March 30, 2018. REUTERS/Tyrone Siu

By Yimou Lee

TAIPEI (Reuters) – Apple (NASDAQ:) Supplier Foxconn’s COVID-19 problems at its sprawling iPhone manufacturing plant in the Chinese city of Zhengzhou could cut the site’s November iPhone shipments by up to 30% , said a source with direct knowledge of the matter.

The source, who declined to be identified because the information was private, said Foxconn was working to increase iPhone production at its factory in the southern city of Shenzhen.

Foxconn referred Reuters to a statement released on Sunday evening, in which the company said the situation was being gradually brought under control and that Foxconn would coordinate backup production capacity with its other factories to reduce any potential impact.

Apple did not immediately respond to a request for comment from Reuters. Shares of Foxconn, officially called Hon Hai Precision Industry Co Ltd, fell 1.9% on Monday morning, compared to a 1.1% rise in the broader market.

Foxconn’s factory in Zhengzhou assembles the majority of the company’s global iPhone production, although Apple also manufactures the product in southern China as well as India.

The factory, which employs around 200,000 workers, has been rocked in recent days by worker dissatisfaction with strict measures to curb COVID-19 at the site.

Several migrant workers fled the factory over the weekend for their hometowns, prompting cities to hastily draw up plans to accommodate them.

The production impact comes amid the traditionally busy period for electronics makers and ahead of the holiday season, which is also prime time for vendors such as Apple.

Under China’s ultra-strict zero COVID policies, localities are required to act quickly to quell any outbreaks, with measures that could include large-scale lockdowns. On Oct. 19, Foxconn banned all meals in canteens and required workers to eat in their dormitories, but said production was normal.

Photographs and videos circulating widely on Chinese social media since Saturday show Foxconn workers crossing fields during the day and along roads at night. Reuters could not immediately verify the authenticity of the messages.

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