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China imposes fresh lockdown around major Apple iPhone plant, here’s why




China imposes new lockdown around major Apple iPhone factory, here's why

China commissioned an industrial park that houses an iPhone factory owned by foxcon to enter a seven-day lockdown, in a move intended to intensify pressure on the Apple supplier as it struggles to assuage the discontent of grassroots workers.

The Zhengzhou The airport economic zone in central China said it would impose “silent management” measures with immediate effect, including banning all residents from leaving and only allowing approved vehicles on the airports. roads in this area.

The restrictions will last until November 9, he said. The lockdown marks a tightening of measures in Zhengzhou, which unexpectedly lifted a near-lockdown of its nearly 13 million people the day before. The city reported 358 locally transmitted cases, down from 95 a day earlier.

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Relentless checks and ad hoc shutdowns across China have fueled resident discontent, hampered economic growth and taken a heavy psychological and financial toll on people and businesses.

Foxconn, formerly Hon Hai Precision Industry Co Ltd, is Apple’s largest iPhone maker, accounting for 70% of iPhone shipments globally. It makes most of the phones from the Zhengzhou factory where it employs around 200,000 people, although it has other smaller production sites in India and southern China.

The notice from the industrial park did not specify how the measures might apply to Foxconn, but the move could impact the movement of goods in and out of the complex.

Foxconn told Reuters in a statement that its campus continued to operate under a “closed-loop management” system, referring to a bubble-like arrangement commonly imposed as part of virus prevention measures in China, where employees sleep, live and work in isolation from the wider world.

Foxconn has struggled to retain staff and ease tensions at the plant, after workers complained about their treatment and arrangements amid COVID-19 prevention measures. Several employees also fled the plant, prompting Foxconn to offer generous bonuses to retain staff.

Market research firm TrendForce said it had cut its forecast for fourth-quarter iPhone shipments to 2-3 million units from 80 million previously due to unrest at the iPhone factory. Zhengzhou, adding that its investigation into the situation revealed that the plant’s capacity utilization rates were now around 70%.

He believed that Foxconn’s production of the iPhone Pro and Pro Max the models would continue exclusively at the Zhengzhou base in the short term, but that Apple planned to spread the production risk of the series by diverting orders to rival manufacturers Luxshare and Pegatronhe added.

Apple did not immediately respond to a request for comment on the TrendForce report, while Foxconn declined to comment.

Reuters reported earlier this week that the factory’s November output could drop 30% due to the covid situation and that Foxconn was trying to increase production at another plant in Shenzhen.

The park was also closed at the end of April for 14 days. Foxconn said at the time that its production at the factory was normal.