The world’s largest Apple iPhone factory is set to see a reduction in shipment in November due to the latest unrest in China this week.
Foxconn’s flagship iPhone plant in China has been grappling with strict COVID-19 restrictions that have fuelled discontent among workers and disrupted production ahead of Christmas and January’s Lunar New Year holiday.
Several workers in the factory have either been put into isolation or have fled the factory.
The Foxconn factory which only makes premium iPhone models, including the iPhone 14 Pro is unlikely to resume full production by the end of this month, Reuters said citing sources.
“The worker unrest at Foxconn’s plant in China could weigh on Apple’s November iPhone shipments,” Victoria Scholar, head of investment at Interactive Investor told the agency.
A ruckus was seen in Foxconn’s iPhone plant this week. Men smashed surveillance cameras and clashed with security personnel as hundreds of workers protested at the world’s biggest iPhone plant in Zhengzhou city on Wednesday, in rare scenes of open dissent in China sparked by claims of overdue pay and frustration over severe Covid restrictions.
Following Wednesday’s escalation, Foxconn could now see more than 30% of the site’s November production affected, up from an internal estimate of up to 30% when the labour issues erupted in late October.
Foxconnon Thursday apologised for a pay-related “technical error” when hiring and later offered 10 000 yuan ($1 400) to protesting new recruits who agreed to resign and leave.
The plant, before its troubles began, employed more than 200 000 staff. It has dormitories, restaurants, basketball courts, and a football pitch across its sprawling roughly 1.4 million-square-metre (15 million-square-foot) facility.
Another Foxconn source told Reuters that some new hires had left the campus but did not elaborate on how many.
Apple shares were down 1.9% in late morning trade on Friday, while the benchmark Nasdaq index was down 0.3%.
Lower shipment of iPhones:
KGI Securities analyst Christine Wang said if the current issue lasts through December, around 10 million units of iPhone production will be lost, which translates to a 12% lower iPhone shipment in the last quarter of 2022.
Wedbush Securities estimates many Apple stores now have 25% to 30% fewer iPhone 14 Pros than normal heading into the holiday shopping season.