TAIPEI (Taiwan News) — Foxconn Technology Group is going to move some production from its iPhone complex in Zhengzhou, which is currently experiencing a COVID outbreak, to other facilities in China.
Workers at the massive iPhone assembly site have been operating under a closed-loop system for more than two weeks, where they are only allowed to move between production lines and their dorms or residences, according to The Wall Street Journal (WSJ). Foxconn said it has around 300,000 workers at the site.
Some of the workers are refusing to go back to the production lines over COVID fears, while others have left altogether. Several videos were posted to Chinese social media over the weekend showing workers leaving the Foxconn site, walking through fields and along roads. In a Sunday (Oct. 30) statement, Foxconn said it is providing transportation to workers who wish to leave.
Sources told The WSJ that Apple and Foxconn expect the disruption to only have a limited effect in the short term because the Taiwanese electronics contract manufacturer is planning to shift some production capacity from Zhengzhou to its facilities in Shenzhen, which can also produce some of the newest iPhone models.
Around 10% of global iPhone production capacity is expected to be affected by the Zhengzhou complex disruption, The WSJ cited analysts as saying. Foxconn shipped around US$32 billion (NT$1.03 trillion) of products from the Zhengzhou site in 2019, making the complex the largest exporter in China, The WSJ said, citing data from government-backed think tank Statistics Association for Foreign Economic Relations and Trade of China.
The COVID disruption at Foxconn’s Zhengzhou site highlights the difficulties and risks for Apple of having so much manufacturing capacity based in China, which is continuing with its restrictive zero-COVID policy. Apple informed some of its contract manufacturers earlier in the year that it’s keen to bolster production outside of China, after a two-month Shanghai lockdown affected production, per the report.