Apple Warns Ongoing COVID-19 Lockdowns in China Significantly Impacting iPhone Production

Melanie Sun
By Melanie Sun
November 8Chinashare

Apple has warned that COVID-19 lockdowns in China are “significantly” impacting its iPhone supply chain.

“COVID-19 restrictions have temporarily impacted the primary iPhone 14 Pro and iPhone 14 Pro Max assembly facility located in Zhengzhou, China,” the company said in a Nov. 6 statement. “The facility is currently operating at significantly reduced capacity.”

The factory makes Apple’s most expensive, high-end iPhone models.

But as the lives and livelihoods of Apple’s China-based assembly line employees are thrown into disarray by the zero-COVID policies of China’s ruling Chinese Communist Party (CCP), Apple is feeling the impacts of the ongoing COVID-19 restrictions.

“We now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products,” the company warned its consumers.

According to the statement, the company is “prioritizing the health and safety of the workers in our supply chain.”

The Apple supplier impacted in Zhengzhou is Foxconn. Its Zhengzhou factory is Apple’s largest iPhone assembly plant in the world and the main source of Apple’s global supply.

Foxconn said on Nov. 7 in response to Apple’s statement that it “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.”

It added that new measures would be implemented to curb the spread of COVID-19 at the factory through a system that restricts factory workers’ movements.

Under the CCP’s policies, many workers at the plant in the capital of Henan Province have been forced into mandatory quarantine after a cluster of positive COVID-19 cases were detected late last month.

According to notices viewed by The Epoch Times, tens of thousands of workers were quarantined during the initial outbreak, although some have since been released after returning consecutive negative tests for multiple days. The Financial Times described the number leaving as a mass “exodus” in an Oct. 30 report.

Authorities ordered a seven-day lockdown for the industrial park where the iPhone factory is located on Nov. 2.

Those who tested positive remain trapped in quarantine, with workers complaining of a lack of basic food, medicines, and living supplies.

Foxconn’s Zhengzhou plant has about 300,000 employees.

Supply Chains in China

Apple’s supply chain in China has been suffering under the CCP’s COVID restrictions since at least April, with Taiwanese supplier Pegatron, which has factories in Shanghai, reporting impacts to operations under the city’s infamous mass lockdowns at the time. Pegatron predicted the disruptions would cost the company up to $8 billion in revenue that quarter.

A number of Foxconn plants in southern China have also been impacted by lockdowns. In August, the company signed a $300 million memorandum of understanding with a developer to expand its facilities in north Vietnam, indicating considerations to expand operations outside of China, as businesses there still face uncertainty over the CCP’s seemingly indefinite economy-busting zero-COVID policies.

In 2021, Foxconn invested $1.5 billion in Vietnam, according to the government of the southeast Asian country. The Apple supplier also has smaller production sites in India.

Foxconn said on Nov. 7 that it has revised down its fourth-quarter outlook for the year. It will release its third-quarter earnings on Nov. 10.

Apple and Foxconn didn’t respond to a request from The Epoch Times for comment by press time.

Jessica Mao and Reuters contributed to this report.

From The Epoch Times

Comments