Apple supplier Foxconn says it is “gradually” restoring production capacity at its sprawling campus in central China, hit by Covid-19 restrictions and worker protests since October.
The “epidemic situation” at the facility, known as iPhone City and normally home to hundreds of thousands of workers, has been brought under control, the Taiwanese contract manufacturer said in a statement on Monday.
“We have also started recruiting new staff and are gradually moving towards restoring production capacity to normal,” he said, adding that the outlook for the fourth quarter should be in line with market consensus.
Foxconn did not provide further details. Its executives reportedly told Reuters that full production would resume between late December and early January.
Ongoing power outages at Foxconn’s Zhengzhou City campus were costing Apple an estimated $1 billion a week in lost iPhone sales, Daniel Ives, an analyst at Wedbush Securities, told CNN Business. He estimates that Apple is short of 10 million to 15 million iPhones in the vital holiday shopping season.
The problems began in October, when workers left the campus over concerns about working conditions and food shortages. With few employees, bonuses were offered to workers to return.
But protests erupted last month when newly hired officials said the administration had broken its promises. Workers clashed with security agents, before the company finally offered them money to quit and leave.
Analysts said the production problems at iPhone City would accelerate the pace of Apple’s supply chain diversification outside of China.
In recent weeks, according to The Wall Street Journal, Apple has accelerated plans to move part of its production out of China. He is reportedly telling suppliers to more actively plan to assemble the company’s products elsewhere in Asia, particularly in India and Vietnam.
Apple did not immediately respond to a request for comment.
“Exiting China will not be easy and will come with clear logistical, engineering and infrastructure hurdles as the aggressive move to 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 single digits currently, he added.
Source: CNN Brasil
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