China has ordered an industrial park that houses an iPhone factory belonging to Foxconn (2317.TW) to enter a seven-day lockdown.
The move on Wednesday is set to intensify pressure on the Apple supplier as it scrambles to quell worker discontent at the base. The Zhengzhou Airport Economy Zone in central China said it would impose “silent management” measures with immediate effect.The curbs, which will last until November 9, include barring all residents from going out and only allowing approved vehicles on roads within that area.
The move could impact the transport of goods in and out of the complex.
Drop in output
Foxconn, formally Hon Hai Precision Industry Co Ltd, is Apple’s biggest iPhone maker, accounting for 70 percent of iPhone shipments globally.
It makes most of the phones at the Zhengzhou plant where it employs about 200,000 people, though it has other smaller production sites in India and south China.
Foxconn has been working to retain staff and smooth over tensions in the factory, after workers complained about their treatment and provisions under Covid-19 prevention measures.
Several employees also fled the factory, prompting Foxconn to offer generous bonuses to retain staff.
Market research firm TrendForce said it had cut its iPhone shipments forecast for the fourth quarter by 2-3 million units, from 80 million previously, due to the troubles at the Zhengzhou plant.
It believed Foxconn’s production of the iPhone Pro and Pro Max models would continue exclusively at the Zhengzhou base in the short-term but that Apple was planning to spread the series’ production-related risks by diverting orders to rival makers Luxshare (002475.SZ) and Pegatron (4938.TW), it added.
Apple did not immediately respond to a request for comment on the TrendForce report, while Foxconn declined comment.
The plant’s November output could fall by 30 percent due to the covid situation, and Foxconn has been working to boost production at another factory in Shenzhen.
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