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Foxconn, Apple’s supplier, has announced plans to gradually restore manufacturing capacity at its sprawling campus in central China.
Covid-19 restrictions and worker protests hit the site two months ago.
Statement
Known as iPhone City, Foxconn has hundreds of thousands of employees.
The Taiwanese contractor said that they recently brought the factory’s epidemic situation under control.
“We have also started to recruit new employees,” the statement said.
“And [we] are gradually moving toward the direction of restoring production capacity to normal.”
The Foxconn statement says that the fourth quarter outlook likely aligns with market consensus.
Read also: Elon Musk wary of Twitter removal from Apple
Disruption
Continued supply disruption to Foxconn’s Zhengzhou campus is costing Apple more than $1 billion a week in lost iPhone sales, according to Wedbush Securities analyst Daniel Ives.
Ives estimates that Apple will be short on just over 10-15 million iPhones before the holiday season.
The disruptions came in October after workers left the campus over concerns about working conditions and food shortages.
The factory offered bonuses to employees due to worker shortages.
However, protests erupted in November when newly hired employees claimed management had not kept its promises.
As a result, employees clashed with security officers before the company offered them cash to quit and leave.
Analysts say the iPhone city’s manufacturing woes are speeding up Apple’s supply chain diversification outside of China.
Read also: Apple to see iPhone 14 models shipment setback
Production shift
According to The Wall Street Journal, Apple recently accelerated plans to move production out of China.
Additionally, the tech giant is telling suppliers to move Apple product assembly to other countries like India and Vietnam.
Daniel Ives wrote a report on Sunday, saying:
“The shift out of China will not be easy and come with clear logistical, engineering, and infrastructure hurdles as the aggressive move to India and Vietnam now begins with the Apple ecosystem alerted.”
If Apple acted aggressively, more than 50% of iPhone production could come from India and Vietnam by the 2025/2026 fiscal year.
Reference:
Foxconn says it’s restoring production at the world’s largest iPhone factory
