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China’s Zhengzhou plant, which has been hit by the coronavirus outbreak, is expected to resume full production around late December to early January, a source at Apple supplier Foxconn said on Monday, after worker unrest disrupted the world’s largest iPhone factory last month. .
The factory in Zhengzhou, in China’s Henan province, has been grappling with strict coronavirus restrictions that have sparked dissatisfaction among workers over factory conditions, Reuters reported. Production of Apple devices was disrupted ahead of the Christmas and Chinese New Year holidays in January, with many workers either having to quarantine to combat the spread of the virus or flee factories.
Reuters reported last month, citing people familiar with the matter, that more than 30 percent of production at Foxconn’s Zhengzhou plant could be affected in November. Foxconn has not disclosed details of the disruption’s impact on its production plans or finances.
Foxconn assembles about 70 percent of iPhones, with the Zhengzhou factory producing most of the high-end models, including the latest iPhone 14 Pro, analysts said.
The person with direct knowledge of the matter said that “capacity is gradually being restored” as the hiring of new staff is underway. The person declined to be named because the information is private.
“If the recruitment goes well, it may take about 3 to 4 weeks to resume full production,” the person said, referring to the period from late December to early January.
Sources said that Foxconn and the local government are working hard on recruitment, but there are still many uncertainties. “We’re firing on all cylinders,” the person said.
Another Foxconn source familiar with the matter said the company wanted to resume full production “as soon as possible,” but could not give a timetable.
“The situation has stabilized,” the person said, referring to the protests and the government’s easing of restrictions on the spread of the virus. “The local government is actively helping with the recovery.”
Foxconn is scheduled to report its November revenue after the market closes on Monday. The Taiwanese company said last month that it expects fourth-quarter revenue from its smart consumer electronics business, which includes smartphones, to decline slightly year-on-year, while revenue from cloud and network products will rise sharply.
Apple plans to move some production out of China
According to the US “Wall Street Journal” report, according to people involved in related discussions, Apple has accelerated its plan to move some production out of China in recent weeks.
Apple is telling suppliers to more aggressively plan to assemble its products elsewhere in Asia, particularly India and Vietnam, and is also trying to reduce its reliance on Taiwanese assemblers, led by Foxconn Technology Group, these people said.
Apple is now the world’s most valuable company, and China has long dominated the company’s supply chain.
The report said Apple’s shift was due in part to unrest in what has been dubbed “iPhone City.” In the vast city within a city in Zhengzhou, China, as many as 300,000 people work in factories run by Foxconn that make iPhones and other Apple products.
According to Counterpoint Research, a market research firm, the factory once accounted for about 85% of the production of the iPhone Pro series.
Analysts and those in Apple’s supply chain say the change means Apple is no longer willing to bundle so much of its business in one place, following a year-long spate of events that have undermined China’s status as a stable manufacturing hub.
According to reports, Apple plans to increase the proportion of iPhone production in India from the current single digits to 45%, and expand the production of Mac series computers, Apple Watch and AirPods series products in Vietnam.
Source: Oriental Daily
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