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Foxconn says it is restoring production at the world's largest iPhone factory in China

2022-12-05T16:03:00.668Z


Ongoing power outages at Foxconn's campus in the city of Zhengzhou were costing Apple an estimated $1 billion a week in lost iPhone sales. The crisis came just before the vital Christmas shopping season.


Foxconn tries to strike a balance with China over shipments 1:03

Hong Kong (CNN Business) --

Apple supplier Foxconn said it is "gradually" restoring production capacity at its sprawling campus in central China, which has been hit by Covid-19 restrictions and protests. of workers since October.

The "epidemic situation" at the facility, known as iPhone City and which normally houses hundreds of thousands of workers, has been brought under control, the Taiwanese manufacturer said in a statement Monday.

“We have also started recruiting new employees and are gradually moving in the direction of restoring production capacity to normal,” he said, adding that the outlook for the fourth quarter was expected to be in line with market consensus.

Foxconn did not provide further details.

Its executives told Reuters that full production would resume between late December and early January.

  • Apple has a big problem with an iPhone factory in China

Violent protests break out in the iPhone factory: these are the images 2:05

Ongoing power outages at Foxconn's campus in the city of Zhengzhou were costing Apple about $1 billion a week in lost iPhone sales, Daniel Ives, an analyst at Wedbush Securities, told CNN Business.

Apple is estimated to be 10 to 15 million iPhones short of the vital holiday shopping season.

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The problems began in October when workers left the campus over concerns about working conditions and food shortages.

Short-staffed, workers were offered bonuses to return.

But protests erupted last month when newly hired staff said management had broken its promises.

The workers clashed with security agents, before the company finally offered them cash to resign and leave.

Analysts said production problems in iPhone City would accelerate the pace of Apple's supply chain diversification out of China.

  • After violent protests, Foxconn offers to pay workers to leave the world's largest iPhone factory

Foxconn workers protest in China 0:44

In recent weeks, according to The Wall Street Journal, Apple has accelerated plans to move some of its production out of China.

It reportedly told suppliers to more actively plan for the assembly of Apple products in other parts of Asia, particularly India and Vietnam.

Apple did not immediately respond to a request for comment.

“Shifting out of China will not be easy and will come with clear logistical, engineering and infrastructure hurdles, as the aggressive move into India and Vietnam now begins with the Apple ecosystem alerted,” Ives wrote in a research report on Sunday. .

If Apple moves aggressively, more than 50% of iPhone production could come from India and Vietnam by the 2025-2026 fiscal year, up from the current percentage in single digits, he added.

Manzana

Source: cnnespanol

All news articles on 2022-12-05

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